Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

ROYAL ASSENT

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Act:
London Underground (Safety Measures) Act 1991

PRIVATE BUSINESS

BRITISH RAILWAYS BILL (By Order)

Order for consideration, as amended, read.

To be considered on Monday 2 December at Seven o'clock.

Oral Answers to Questions — NATIONAL FINANCE

Corporation Tax

Mr. Gill: To ask the Chancellor of the Exchequer what is the level of corporation tax for small companies; and what it was 12 years ago.

The Financial Secretary to the Treasury (Mr. Francis Maude): The small companies rate of corporation tax is 25 per cent. compared with 42 per cent. at the time of the 1979 general election.

Mr. Gill: I congratulate my hon. Friend on the Government's significant progress in reducing corporate tax rates. However, will he assure the House that the importance of retained profits is truly understood by his Department, especially in relation to unquoted companies where the profits ploughed back by those companies are often the only source of capital? If that seedcorn is confiscated, it inevitably drives companies into the hands of their bankers, which gives rise to many of the problems that small businesses are currently experiencing.

Mr. Maude: I take my hon. Friend's question as an expression of support for our policy of increasing the amount of profit that is left with companies for them to retain or distribute as they think proper. That is the best way of providing a good environment in which businesses can flourish. That is the judgment not just of the Government, but of those hard-hearted characters who decide where mobile investment projects should go ill the EC. The majority of Japanese mobile investment projects and many of the American projects are coming to Britain in preference to anywhere else because Britain has the best environment in which to do business.

Mr. Battle: Is not the uniform business rate imposed by the Government hammering small businesses which cannot pay it? Is not that an extra tax that the Government have imposed on business?

Mr. Maude: Britain is full of small business people who are breathing a sigh of relief that their business rate is limited to an increase in the retail prices index rather than the 60 or 70 per cent. annual increases that some irresponsible Labour-controlled councils were imposing and which had the sole effect of driving businesses out of many of our major inner-city centres.

Mr. Hill: My hon. Friend will realise that his statement on corporation tax for small companies needs slight adjustment and I am sure that he is considering a major adjustment on capital gains, which I understand is one of the taxes where the cost of collection exceeds the revenue. Will he consider those matters before the next budget?

Mr. Maude: I treat my hon. Friend's question as an early Budget representation, which I have noted and will consider carefully.

Bank of Credit and Commerce International

Mr. Vaz: To ask the Chancellor of the Exchequer if he has had any further discussions concerning the closure of the Bank of Credit and Commerce International; and if he will make a statement.

The Economic Secretary to the Treasury (Mr. John Maples): Both I and my officials have had a number of such discussions with a variety of people. On 6 November I saw a delegation of small business men who had been customers of BCCI, and yesterday I saw representatives of the BCCI depositors protection association.

Mr. Vaz: Will the Minister join me in welcoming the proposals put forward by the provisional liquidator and the Sheikh of Abu Dhabi as a first step towards a settlement of the problem? Will he confirm that the Government support a further adjournment of the liquidation period on Monday to allow the negotiations to be completed? Does he agree that the liquidators and other representatives should study every proposal and option in order to secure the best possible deal for depositors, creditors and former members of staff?

Mr. Maples: Obviously, the Government share the hon. Gentleman's pleasure at the fact that the liquidator may well be working out an arrangement with the main shareholders that would mean BCCI's creditors possibly getting a considerably greater return on what they are owed than was previously thought possible. Those negotiations are a matter for the liquidator and shareholders, and the question of what the court should do is a matter for the court and the parties before it, not the Government.

Mr. Molyneaux: Does the Minister agree that we are long past the stage of apportioning blame? People may have been misled, but they may not have been. Should not we now bend our efforts to supporting the proposal that the Minister mentioned and to finding some way of compensating those who have lost dearly?

Mr. Maples: The first line of compensation is the deposit protection scheme, which needs a liquidation order


to come into effect. Whether or not that will happen on 2 December remains to be seen. The Government will welcome any arrangement that the liquidator and the principal shareholders can make that would result in BCCI's depositors getting a considerably greater return on their investment than was previously thought possible.

Mr. Boateng: Does the Minister share the view of Sir Leon Brittan and the European Commission that there should be a Europeanwide deposit protection scheme—[HON. MEMBERS: "No."] Such is the hostility of Conservative Members to Europe that it is quite mind-boggling. Does the Minister also share Sir Leon's view that such a scheme should include non-sterling deposits? In the aftermath of the Bingham inquiry, will he ensure that there is a full review of the second banking directive?

Mr. Maples: Clearly, the Government will take appropriate action on any recommendations that result from the Bingham inquiry. Early drafts of a possible EC directive on a Europeanwide deposit protection scheme are being discussed. We think that the basis should be home country protection and that one should not be liable to pay deposits in other people's currencies.

Inflation

Mr. Harry Greenway: To ask the Chancellor of the Exchequer what is the current level of retail price inflation in the United Kingdom; and what is the average within the European Community.

Sir Michael Neubert: To ask the Chancellor of the Exchequer what is the latest annual rate of inflation.

The Chancellor of the Exchequer (Mr. Norman Lamont): Headline retail prices index inflation in the United Kingdom was 3·7 per cent. in the year to October—the lowest for three and a half years. The latest available average for the European Community is 4·6 per cent. in the year to September.

Mr. Greenway: Are not those figures very encouraging? Does not the fact that our inflation rate is lower than the European Community average offer a real opportunity to British industry to improve its competitiveness? Does my right hon. Friend by any chance recollect the average inflation rate under the last Labour Government? What does he think about that?

Mr. Lamont: Just by chance, I do remember it. The average inflation rate under the last Labour Government was no less than the astonishing figure of 15½ per cent. What is so interesting is that despite that disastrous performance, Labour's policies have hardly altered—and they would have the same effect again.

Sir Michael Neubert: While the reduction in price rises is very welcome—taking us back to where we were three and a half years ago—does my right hon. Friend recognise the irony that, as a result, current interest rates—the price of money—are, in real terms, at an all-time high? Can he defy what may appear to be a paradox by both easing the burden of excessive interest rates and pressing on relentlessly until inflation is completely eradicated from the economy?

Mr. Lamont: My hon. Friend asks me to do several things that might not be so easy to do at once. Our first priority must be to maintain the pound's position within the exchange rate mechanism. That is our policy for interest rates. At the same time, we have been able to achieve a dramatic reduction in inflation—which, because it is better than the European Community average, means that there are better prospects for exporting firms and for the jobs in them. There is no way that we can sustain high employment unless we are competitive in inflation levels.

Dr. Bray: Is the Chancellor worried that we are not sustaining high employment? Is he worried that it has taken such a deep and prolonged recession to reduce inflation to its current level? Does he think that he is doing a good job in alerting the country to the rapid rate of convergence at which he is aiming in the exchange rate mechanism and the possible move towards European monetary union?

Mr. Lamont: I am astonished at the hon. Gentleman's last point. If I understood him correctly, he seemed to be saying that our inflation rate was converging too quickly, and that that was imposing costs on the economy. That is an extraordinary contrast with the uncritical support for monetary union expressed by his right hon. and hon. Friends, who want to leap in with no conditions and to throw away the conditions that we have negotiated—[Laughter.] Labour Members scoff, but that is precisely what the Leader of the Opposition said in the debate the other day.

Mr. Higgins: My right hon. Friend is to be congratulated on the dramatic reduction in the inflation rate. Is he aware that in setting standard spending assessments for prudent local authorities, my right hon. Friend the Secretary of State for the Environment expects them to achieve an even greater reduction in costs and prices? In the light of that, will my right hon. Friend the Chancellor consider consulting the Secretary of State to establish whether the SSAs for prudent authorities, which demand such remarkable reductions in costs and prices, are really justified?

Mr. Lamont: That is an extremely ingenious question. I know that my right hon. Friend has already made those points to my right hon. Friend the Secretary of State for the Environment. We believe, however, that the settlement that my right hon. Friend the Secretary of State announced to the House the other day is realistic and generous and that all responsible local authorities should be able to cope with it.

Mr. James Lamond: The reduction in inflation is to be welcomed; it will greatly assist in increasing the number of job opportunities. However, does not every reduction in the inflation rate leave the real interest rate a little higher? Surely the Chancellor now has the opportunity to announce a further cut in interest rates. That would help every company in the country, including the small companies that were the subject of an earlier question.

Mr. Lamont: As I have already said, our first priority will be to maintain the external value of the currency—that is, to maintain its position in the exchange rate mechanism. I dread to think where the pound would have been in the past few days if I had followed the advice of Opposition Members.

Mr. Chris Smith: The Chancellor will probably recall that his right hon. Friend the Prime Minister, when he was Chancellor, told the House on 15 February 1990 that the retail prices index was an inaccurate measure of the real rate of inflation. He reiterated that point in June and again in July.
Is not it the case that the present underlying rate of inflation in the United Kingdom is 5·5 per cent. if mortgage interest rates are excluded, and 7·3 per cent. if both mortgage interest rates and poll tax are excluded? Is it not also the case that the underlying rate was 5·9 per cent. when the right hon. Member for Huntingdon (Mr. Major) became Chancellor, and that it is now 7·3 per cent? A little more humility would not go amiss.

Mr. Lamont: I touched on those points yesterday when I appeared before the Treasury Select Committee. Whether we take the retail prices index minus mortgage interest payments or producer prices, the rate of inflation has declined sharply in the past year and I suspect that the underlying measures of inflation will continue to decline in the next year—[Interruption.] I can tell the right hon. and learned Member for Monklands, East (Mr. Smith), who is interrupting from a sedentary position, that the underlying rate of inflation compares extremely well with the position under the Labour Government of which he was a member.

Manufacturing Industry

Mr. Allen McKay: To ask the Chancellor of the Exchequer what was the average annual rate of investment in manufacturing industry (a) from 1974 to 1979 and (b) since 1979.

The Chief Secretary to the Treasury (Mr. David Mellor): Manufacturing investment, narrowly defined, averaged £9·8 billion a year between 1974 and 1979 and £9·8 billion a year between 1979 and 1990 at constant 1985 prices. Total capital investment in plant and machinery averaged £17·7 billion between 1974 and 1979 and £24·3 billion a year between 1979 and 1990, also at constant 1985 prices.

Mr. McKay: The Minister has chosen his statistics carefully. Has not he forgotten to mention that between 1979 and 1981 investment fell sharply and that it was lower in the third quarter of 1991 than in any other quarter—12 per cent. of the 1979 level? With all the income from oil and from selling off the family silver, is not it a disgrace that manufacturing investment is now lower than in 1979? If the right hon. and learned Gentleman believes in that vital sector of our economy, why does not he take measures to increase investment?

Mr. Mellor: If one takes the narrow definition of manufacturing investment, which excludes a range of investment that is made by manufacturing companies in services that no longer count as manufacturing investment but which they used to do in-house, the average for the past six years was£10·9 billion—much higher than under the previous Labour Government. I do not know what the Labour party is so proud of, because under the previous Labour Government manufacturing output fell by 2½ per cent. whereas between 1981 and 1991 it increased by 25 per cent.

Mrs. Peacock: Will my right hon. and learned Friend confirm that in the 1980s manufacturing output rose by 31 per cent? Irrespective of what the Labour party says

about what happened before 1979, if he visited various parts of Yorkshire he would see massive investment in manufacturing, including £1 million in wool textiles.

Mr. Mellor: My hon. Friend is absolutely right, but the international comparisons are even more telling. In the 1970s—for much of which there was a Labour Government—the United Kingdom was the only Group of Seven country where average year-on-year manufacturing output fell. In the 1980s, we ran joint third among the Group of Seven, which was a considerable improvement

Mr. Nicholas Brown: Is the Chief Secretary aware that today 900 of our fellow citizens in Derby, Crewe and York will lose their jobs in the manufacturing sector? Is he further aware that since 1979, 2 million of our fellow citizens have lost their jobs in the manufacturing sector? Is it the Government's policy to arrest the accelerating decline in manufacturing—both in investment and employment—and, if so, when they will do it and how?

Mr. Mellor: There is evidence that the decline in manufacturing has been arrested, and I shall give the hon. Gentleman that evidence. It seems clear that in 1991, as in 1990 and 1989 and after decades of decline, Britain's portion of world trade in manufacturing exports will increase. That is a significant achievement, of which the hon. Gentleman should be aware. Despite the Labour party's smears about what has been happening recently, manufacturing exports are up this year, notwithstanding the recession.

Mr. Alex Carlile: The latest Confederation of British Industry economic forecast shows a decline in manufacturing investment in 1991 of almost 20 per cent. and a further decline of 4·4 per cent. in 1992. Is the right hon. and learned Gentleman satisfied with that performance?

Mr. Mellor: What is absolutely clear is that——

Mr. John Smith: Answer the question.

Mr. Mellor: I am about to do so. It is not an answer that the right hon. and learned Gentleman will like.
The only basis on which criticism can be made of the inevitable decline in investment during the recession is if high praise is lavished on the Government for the three years in the last 1980s when investment touched peaks. Even with the decline in business investment in this recession, it is about 40 per cent. higher in real terms than in 1979. That is the proof of our achievement in the 1980s, to which we can return.

Mr. Andrew Mitchell: Does not business investment, of which manufacturing investment is a part, remain extremely high? Is not it higher today than throughout the 1970s and the first half of the 1980s?

Mr. Mellor: My hon. Friend is absolutely right. I am only too happy to discuss manufacturing, as it is an important sector of the economy. However, it is 20 per cent. of the economy and I never understand why the Labour party is not interested in the other 80 per cent. It appears that unless people go to work in some landscape recognisable to L. S. Lowry, their jobs, conditions and efforts are not worth talking about.

Consumer Debt

Mr. Alton: To ask the Chancellor of the Exchequer what is the current level of consumer debt in Britain; and what was the comparable figure in 1981.

Mr. Maples: The level of outstanding consumer debt at 30 September this year was £52·6 billion. Because of changes in coverage, comparable figures are not available for 1981.

Mr. Alton: Those figures, which show £52 billion of personal debt excluding mortgages, surely represent personal misery and are a major cause of family and social breakdown. Does the Minister think that it is now time to implement the proposals in the report "Escaping the Debt Trap" to introduce social loans, to take more stringent action against loan sharks who exploit poor people by their extortionate interest rates and to encourage a more responsible lending policy by banks?

Mr. Maples: On the question of extortion and credit, the Director General of Fair Trading published a report in September which the Department of Trade and Industry is considering. As for the proposals contained in "Escaping the Debt Trap"—the hon. Gentleman kindly sent me a copy—it will not surprise him if I do not agree with all of them. It is not the Government's business to start telling banks and consumers what arrangements they should make between themselves although, clearly, some people are in difficulties with consumer credit. I do not think that the fact that consumer credit is at a high level is evidence that people are miserable—they have done things with the money that they have. Most have either made sensible investments or have bought what they wanted and could afford.

Mr. Loyden: Does the Minister recognise that the question of loan sharks has been on the agenda for the past 12 years, but that nothing positive has occurred other than the report to which he referred? Is not it time that the Government took on board that question and began to tackle the problem of loan sharks positively? Such action is certainly lacking at the moment.

Mr. Maples: As I said in reply to the hon. Member for Liverpool, Mossley Hill (Mr. Alton), the Government have obtained a report from the Director General of Fair Trading, which was only published on 24 September. It is reasonable to give the appropriate Ministers at the Department of Trade and Industry a little more time to respond to it.

Public Spending

Mr. Cohen: To ask the Chancellor of the Exchequer if he will make a further statement about public spending levels.

Mr. Mellor: The Government's plans for public spending were announced in the Chancellor's autumn statement on 6 November. Further details were set out in the written statement published on 13 November.

Mr. Cohen: Most people who see the run-down state of schools and public transport do not think that the picture of public spending is as rosy as that set out by the Chancellor. Does the Minister remember that before the last general election the Government promised an increase

in public spending of £11·2 billion in the following three years? In fact, it turned out to be a cut of £12·7 billion. In those circumstances, is not the Chancellor's promise of an extra £10 billion a similar Tory election hoax? Far from protecting public services, is not the Conservative party the party of public squalor?

Mr. Mellor: The hon. Gentleman would do me a great favour if he could kindly confirm that his party, if in power, would spend an extra £13 billion above what we are spending. We have been trying to extract the figures from the Opposition. If the hon. Gentleman has agreed with members of his Front Bench that that is the line to take, I should be glad of confirmation.

Mr. John Marshall: Does my right hon. and learned Friend agree that spending an extra £35 billion could be financed only by massive increases in taxation and higher interest rates, which would lead to a massive increase in the level of unemployment?

Mr. Mellor: This is a point to which we return time and again. No Opposition have ever mutilated more forests in the interests of producing an endless stream of written policy documents containing come-ons and pledges of all sorts to every sectional interest, but when we add up those pledges and cost them, the Labour party becomes very coy. We want to know—[Interruption.] The right hon. and learned Member for Monklands, East (Mr. Smith) can leap up and tell me—the House would be delighted to hear from him—how he will cover the difference between the £10 billion of extra taxation to which his party has already committed itself and the £35 billion of extra spending to which it has also committed itself?

Mrs. Beckett: rose——

Hon. Members: Answer!

Mrs. Beckett: When I am on the Government side of the House it will be my turn to answer questions. Now it is my turn to ask them.
Speaking of how to meet levels of public spending, does the Chief Secretary recall the sharp increase in borrowing forecast in his public spending programmes? Will he confirm that it would be grossly irresponsible for any Government to cut the standard rate of income tax when public borrowing is about to shoot up in that way and that consequently, if the Chancellor of the Exchequer proposes such a cut in his next Budget, he will have to make it up by increasing other taxes—perhaps VAT?

Mr. Mellor: The record shows that during the 1980s we were able both to increase public expenditure in real terms by about 20 per cent. and to cut tax rates—[HON. MEMBERS: "No!"] Oh yes—and for the decade following 1981–82, we reduced the tax burden.

Mr. Campbell-Savours: That is wrong.

Mr. Mellor: It is not wrong and I understand that next week we shall have the opportunity to debate the correctness of what I have said.

Mr. Nicholls: Given the new-found concern of the hon. Member for Derby, South (Mrs. Beckett) about public borrowing, will my right hon. and learned Friend remind her that the previous Labour Chancellor of the Exchequer managed to borrow not only more money than any


previous Chancellor, but more money than all previous Chancellors added together? What would that do for the living conditions of the poor?

Mr. Mellor: It is an interesting fact that the fastest-growing public expenditure programme under the Labour Government was not the health service, education or social services, but debt interest.

Fixed Investment

Mr. Bill Michie: To ask the Chancellor of the Exchequer what is the latest International Monetary Fund forecast for growth in United Kingdom business fixed investment in 1991.

Mr. Mellor: A fall of 12 per cent. from the historically high levels reached in 1989 and 1990 is forecast. In 1991 business investment will still be 37 per cent. higher in real terms than in 1979.

Mr. Michie: Is the Chief Secretary aware of the IMF prediction of a further 2 per cent. cut in investment next year? Is he unaware of the ever-deepening industrial crisis if such cuts were to take place next year? Is not it time that he built the economy in a constructive way rather than just waffling about it?

Mr. Mellor: As Gavyn Davies, who may be better known to some Opposition Members than he is to us, has said, the interesting thing is at how high a proportion of GDP investment has settled, notwithstanding the recession. It is 14·1 per cent. of GDP for the second half of 1991—that is a high level. If Labour Members wish regularly to employ international statistics on investment, they should bear in mind the fact that during the 1970s the average annual growth rate in business investment in the United Kingdom was 2·3 per cent., against an average of 3·1 per cent. for the Group of Seven. In the 1980s the average annual growth rate in business investment was 6·7 per cent. as against a Group of Seven average of 4·6 per cent. That is quite a transformation.

Mr. Batiste: Is not it clear that the excellent record of business investment in the United Kingdom reflects the fact that business men recognise the Government's commitment to containing inflation in the long term? After all, it is the cost of capital which determines business investment. Would not that be threatened only by the advent of a Labour Government, with their profligate spending plans?

Mr. Mellor: Yes. It also reflects the bold decision taken by my right hon. Friend the Member for Blaby (Mr. Lawson) to cut corporation tax and liberate a range of resources for investments which companies would choose for themselves rather than being pointed in a certain direction by the distorting effect of allowances. In the middle to late 1980s that led not only to an unprecedented increase in investment in terms of value, but to a sharp increase in the quality of that investment. That is evidenced by the unprecedented increase in the productivity of all manner of industries that has taken place since.

Mr. Robert Sheldon: Will the right hon. and learned Gentleman have a serious look at capital allowances, especially for plant and machinery, which should not have only a 25 per cent. capital allowance? That is not an

incentive; it is a penal rate. Will the right hon. and learned Gentleman consult the Confederation of British Industry, which is coming round to the view that a 40 per cent. rate—which is not enough—would be appropriate?

Mr. Mellor: The real point that one needs to note is the increase in capital investment in plant and machinery under this Government—[Interruption.] It is no good hon. Members shaking their heads. Since I gave the figures to the House last time, they have not been contradicted. I will give them again and, if I am wrong, I shall have to be put right next week. Gross investment in plant and machinery in the last year in which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) had stewardship of these matters, at constant 1985 prices, was just over £17 billion. In 1990, it was over £32 billion. That is comparing like with like and is a sign of the real difference in investment under this Government.

Mr. Ian Taylor: Does my right hon. and learned Friend remember that under the previous Labour Government, the International Monetary Fund came to the rescue? Is not a warning signal needed for Labour Front-Bench Members over the current draft proposal on economic and monetary union, because it contains a no bail-out clause? This country had better not be under a Labour Government.

Mr. Mellor: That is one of the subtleties of the European negotiations that should impinge on the consciousness of Opposition Members.

Mr. John Smith: As the Chief Secretary takes refuge in international comparisons, especially with the other countries of the Group of Seven, will he explain why the United Kingdom is not only at the bottom of the investment league of the G7, but at the bottom of the investment league of leading European nations?

Mr. Mellor: That is a very short-term statistic. It is clear that over the 1980s, our investment record has run well ahead of that of the rest of the Group of Seven. We shall return to that. The right hon. and learned Gentleman and I can swap statistics quite soon and I look forward to it.

Interest Rates

Sir John Farr: To ask the Chancellor of the Exchequer if he will make a statement on the current level of interest rates.

Mr. Maples: Base rates are 10½ per cent.

Sir John Farr: Does my hon. Friend believe that interest rates should be reduced by 0·5 per cent. now and that immediate action would save thousands of jobs? Do the Government have the ability to make that adjustment, or are they tied hand and foot by the exchange rate mechanism? If so, will my hon. Friend say so?

Mr. Maples: My hon. Friend knows that our policy on interest rates is to set them in a way that is compatible with our commitment to the pound's band within the exchange rate mechanism and to bear down on inflation. That policy has been manifestly successful over the past 12 months in reducing the rate of inflation to 3·7 per cent.

Sir Patrick Duffy: Is the Minister aware that a respectable reason for high interest rates is the control of inflation? However, given the claim of the Chancellor of


the Exchequer, in response to the hon. Member for Ealing, North (Mr. Greenway), about lower inflation, should not the Chancellor have a little more regard for board rooms where, in the balance between optimism and pessimism, the state of opinion remains distinctly negative, than for the exigencies of the exchange rate mechanism?

Mr. Maples: The mood in board rooms as disclosed by the CBI business confidence survey shows something rather different—a substantial and continuing increase in business confidence. Business men who are borrowers naturally want lower interest rates, but I am afraid that the Government have to take a rather broader view of what is in the interests of the economy. They cannot simply allow one sectional interest in the community to override others.

Mr. Nicholas Winterton: Does my hon. Friend accept that high interest rates are a disincentive to investment? Instead of indulging in sterile exchanges of statistics across the Chamber, should not the House decide whether the level of investment in this country is adequate to ensure that our manufacturing base can compete against other countries? [HON. MEMBERS: "Hear, hear."] How does the level of investment in this country compare with that of our major competitors?

Mr. Maples: I am surprised that Opposition Members cheered that question. They obviously have short memories. My right hon. and learned Friend the Chief Secretary has given them the figures on investment in this country and they are rather good. Interest rates are set, as I said, in a way that is compatible with our commitment to the exchange rate mechanism and to bear down on inflation. That policy has been successful. There is nothing in the long run that is more damaging to investment than inflation.

VAT

Mr. Turner: To ask the Chancellor of the Exchequer what have been the changes in the rates of value added tax since the beginning of 1979.

Mr. Maples: From 18 June 1979, the higher rate of VAT was abolished and the standard rate of VAT became 15 per cent. On 1 April this year that rate was increased to 17½ per cent.

Mr. Turner: I thank the Minister for his answer. It demonstrates clearly the enormous burden of indirect taxation that has been placed on the shoulders of millions of families since the Government came to power. Will the Minister give the House a categorical assurance that VAT on road and rail transport will not be increased?

Mr. Maples: What short memories we have. The hon. Gentleman does not remember that, under the previous Labour Government, the rate of VAT on things that they described as luxuries, such as petrol and caravans, was 25 per cent. I can certainly give the hon. Gentleman an assurance that we will not go back to that.

Mr. Budgen: Does my hon. Friend concede that the cause of the recession is not the high level of value added tax, but our membership of the exchange rate mechanism? Does he concede also that the question is not whether the war can be won, but whether it can be won with fewer

casualties? Is not there a risk that, in future, the present Chancellor will be known in the economy as soldiers remember Field Marshal Lord Haig?

Mr. Maples: No.

PSBR

Mr. John Evans: To ask the Chancellor of the Exchequer what he estimates the public sector borrowing requirement will be for 1992–93.

Mr. Norman Lamont: The actual PSBR for 1992–93 will be set in the Budget. A working assumption of a PSBR of 3 per cent. of GDP was used to construct the autumn statement forecast.

Mr. Evans: Will the Chancellor confirm that the large increase in the public sector borrowing requirement planned for next year will be to pay for the massive increase in unemployment which has been brought about by his own economic incompetence?

Mr. Lamont: Of the £6 billion increase in the planning total, it is true that £4 billion is for social security, but not all that—indeed, I think that only about £2 billion—is the increase in unemployment benefit. There is another £2 billion for other benefits. There is also a large increase in the financing programmes of nationalised industries. I thought that Opposition Members wanted more investment in infrastructure. That is what they are always telling us and that is what they have got.

Mr. Tim Smith: What would the public sector borrowing requirement be today if it was running at the same proportion of GDP as in 1975–76?

Mr. Lamont: My hon. Friend, remarkably, has those figures at his fingertips. He knows that it was 9½ per cent. of GDP. That would be in excess of £50 billion today. As my right hon. and learned Friend the Chief Secretary pointed out, when the Labour party was in power the fastest-growing item of Government expenditure was debt interest. They would certainly have had no chance of financing their programme without large increases both in taxation and in the borrowing requirement.

Dr. Marek: Will the Chancellor have a word with his Chief Secretary and tell him the facts of life, which are that the burden of taxation is much higher than it was in 1970 when the Labour party was in office? As the Chancellor has decimated British industry, how will he pay for all the public borrowing? Has he a secret agenda to put VAT, for example, on items which bear no VAT at present, such as railway fares, books and periodicals? Has he a secret agenda to increase VAT to 22 per cent? Has he a secret agenda to do both?

Mr. Lamont: The hon. Gentleman's question makes no sense. He asked how we are going to pay for the borrowing. We shall pay for the borrowing by borrowing—that is the normal way in which one pays for it.

Sir Ian Stewart: Does my right hon. Friend agree that if the Labour party implemented even a fraction of the spending priorities that it has been spreading around over the past year or two, to the tune of £30 billion or £40 billion extra expenditure, it would not only have to


face the problem of raising taxation, but would have to resort to massive borrowing, which would increase interest rates and greatly damage the economy?

Mr. Lamont: My right hon. Friend is absolutely right. The Labour party seems to have a new-found concern about the level of borrowing, but I must advise the Opposition that if they are serious about that, they could pay for their programme only by increases in taxation. There is no other way.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Barry Field: To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

The Prime Minister (Mr. John Major): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Field: I congratulate my right hon. Friend on the anniversary of his Prime Ministership. May I remind him that inflation has come down from 10·9 to 3·7 per cent., that interest rates have been cut by 4·5 percentage points and that we have the lowest level of inflation for 25 years—below that of west Germany. Is not that in marked contrast to the events of 25 years ago this very day, as reported by The Times, when the then Economic Affairs Minister warned the Confederation of British Industry that if it breached the inflation-wage restraint, there would be a prices and incomes policy? It brought the worst economic turmoil that this country had seen since the industrial revolution. Will my right hon. Friend set out his policy for 1992—[interruption]—so that I can congratulate him on his anniversary again next year, when he will still be Prime Minister?

The Prime Minister: I am grateful to my hon. Friend. He is right about the success of the anti-inflationary policy. It is absolutely imperative that we get inflation down to the lowest level and keep it there, for most of our future prospects depend on that being the case. Happily, we are making excellent progress on inflation. It has come down and we shall ensure that it stays down.

Mr. Kinnock: Is the Prime Minister aware that in the past 12 months, because of his policies, 768,000 people have lost their jobs, 100,000 people have lost their homes and 45,000 companies have gone bankrupt? How does he square that record with his promise a year ago today to build a country at ease with itself?

The Prime Minister: If the right hon. Gentleman examines completely what has happened during the past year with that objective in mind, he will find that not only have we cut inflation, as I have just said, but we have cut interest rates. We have given Britain the lowest corporate tax rates in Europe. We have successfully come through a war. We have successfully produced a new initiative for the Kurds which has saved hundreds of thousands of lives. We have introduced the largest debt relief package anywhere

at any stage and we have made changes in both domestic and overseas policies which command the wide respect of people throughout the country.

Mr. Kinnock: Is not it clear that everyone knows that the Prime Minister has reduced inflation only by creating a deep and lasting recession? The right hon. Gentleman has lost more jobs, more businesses and more homes than any Prime Minister in modern history. He truly will be known as the Prime Minister of evictions, unemployment and bankruptcies and that is why, as soon as the people get the chance at the next general election, they will stop him.

The Prime Minister: The right hon. Gentleman cannot seriously expect that the people of this country will buy the pig-in-a-poke policies that he produces. Now that inflation and interest rates are coming down, the economy is moving into an upturn and prospects are getting better, as even the Labour party's former adviser has agreed and written repeatedly in the newspapers.

Mr. Kinnock: If there are any pig-in-a-poke policies, the recession policies of the Government are the pig and 768,000 people have got the poke.

The Prime Minister: I can only assume that the right hon. Gentleman's last question was a knee-jerk reaction.

Derbyshire

Mrs. Currie: To ask the Prime Minister if he has any plans to visit Derbyshire.

The Prime Minister: I am making a series of visits to all parts of the country and very much hope to include Derbyshire.

Mrs. Currie: Is the Prime Minister aware that in south Derbyshire, having seen off Arthur Scargill, we have a vigorous, successful engineering industry, a high level of exports and a young and growing work force with a low level of unemployment? We know that we are far better off in Europe—indeed, we are well off in Europe—and far better off in Europe than out. May I therefore pass on to the Prime Minister the good wishes of all my constituents for his efforts at Maastricht and hope that when he has finished there he will come up to Derbyshire and tell us all about it?

The Prime Minister: I am grateful to my hon. Friend. I share her view that industry, commerce and individuals in this country are better off in the European Community than outside it. Many companies are increasing their sales and increasing their relationship with Europe week after week. One of our objectives at Maastricht will be to achieve stricter implementation of Community measures to ensure that there is genuinely a level playing field for British industry and commerce in Europe.

Mr. Skinner: If the Prime Minister comes to Derbyshire, whatever else he does, he wants to avoid canvassing with the hon. Member for Derbyshire, South (Mrs. Currie). When she went to Bolsover a few years ago at the time of the salmonella in eggs crisis, she went into South Normanton marketplace and met a woman there who said, "Hey you, are you Currie, the one about the salmonella?" The hon. Lady said, "Oh, yes. Are you going to vote Tory?" The woman said, "Look, I've got six of


these eggs in my basket and if you don't sling your hook back to south Derbyshire, you'll have these on top of your head."

Mr. Speaker: I did not detect a question in all that, but carry on.

The Prime Minister: I suspect that many people in Bolsover will carry eggs in their basket in the hope of meeting the hon. Gentleman.

Engagements

Sir David Steel: To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

The Prime Minister: I refer the right hon. Gentleman to the reply that I gave some moments ago.

Sir David Steel: Does the Prime Minister accept that any reform of the government of Scotland implies some useful reform of the procedures of this place? As it is now three weeks since the Kincardine and Deeside by-election, when will he respond to our invitation to meet him to discuss these serious matters?

The Prime Minister: I have made it clear to the right hon. Gentleman and to the House that we believe that the Union between the United Kingdom and Scotland is important. We have no plans to change it.

Mr. Adley: To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Adley: Does my right hon. Friend recall the answer that he gave to my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) on Tuesday about monetary union? He said that he was surprised at the contradictory answers which the House had received from the shadow Chancellor and the Leader of the Opposition on this complex issue. Why was my right hon. Friend surprised?

The Prime Minister: I am always hoping for something better from the right hon. Gentlemens although, alas, I rarely get it. The Leader of the Opposition claims that he has been a consistent supporter of the Common Market for years, but everyone knows that he was a consistent and bitter opponent of it for many years. Many of us doubt that he has really changed his mind.

Liverpool

Mr. Parry: To ask the Prime Minister when he plans to make his first visit to Liverpool.

The Prime Minister: I am making a series of visits to all parts of the country and hope to include Liverpool in them.

Mr. Parry: When the Prime Minister visits Liverpool will he meet some of the local trade union leaders and some of the long-term unemployed, especially the construction workers who lobbied Parliament last week? Unemployment is very high in Liverpool. My constituency has the highest level in England, Scotland and Wales with an average of 30 per cent. When the Prime Minister arrives, will he let people know that he is coming? His

predecessor, the right hon. Member for Finchley (Mrs. Thatcher), crept into Liverpool and crept out again without letting people know that she was coming. That was an insult to the people of Liverpool and I hope that it will never be repeated.

The Prime Minister: I will certainly bear that in mind. I share the hon. Gentleman's concern about unemployment in Liverpool and elsewhere. I know that he will join me in welcoming the announcement yesterday by my hon. Friend the Minister of State, Treasury at the start of the project to construct a new building for Customs and Excise at Queen's dock. When completed, it will provide more than 800 new jobs locally.

Mr. Michael Spicer: Will my right hon. Friend give his assurance that, neither explicitly nor implicitly will any deal be done at Maastricht?—[Interruption.]

Mr. Speaker: Order. It will have to be done in Liverpool, I am afraid.

Engagements

Mr. David Martin: To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Martin: Is my right hon. Friend aware that in Portsmouth, which is connected to the continent by the finest ferry services in the country, there is a growing realisation that success at Maastricht is crucial to trade and investment, on which jobs depend, and that the main prize to be achieved is an agreement which recognises the importance of closer co-operation between European nations rather than moves towards inevitable integration?

The Prime Minister: I agree with my hon. Friend. It is crucial to our trade and investment that we continue to play a leading role in the Community. All the Governments of the Community, without exception, are working for an agreement at Maastricht, but there are important national interests at stake. I am negotiating for an agreement that reflects our national interests and is also in the interests of a wider Europe.

Mrs. Wise: Does the Prime Minister understand that his description of the Sunday trading laws as "bizarre" has encouraged law breaking? Will he withdraw that word and condemn the retail giant law breakers?

The Prime Minister: I should have thought that the hon. Lady would now recognise that the description that I gave was entirely apposite. The present situation is unsatisfactory. There are acute difficulties in changing that in the short term. The House of Lords has concluded that our Sunday trading laws are unclear and has therefore referred them to the European Court of Justice to clarify whether they are compatible with European law. We hope that the European Court will make its ruling at the earliest possible moment so that the House of Lords can give a judgment. In the light of that, the next step will be for the Government to identify proposals that will command the support of the House.

Mr. David Evans: To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Evans: Will my right hon. Friend confirm that on 15 May 1983 he said:
We want out of the Common Market?
Could he also tell me whether he said on 16 December 1983:
We are committed to a non-nuclear defence policy?
Also will he confirm that in August 1991 he said:
I think the people trust me. They trust me for my word and my attitude.
Would he also tell me——

Mr. Speaker: Order. I think that is enough.

The Prime Minister: I can confirm that, of course, I made none of those statements, but I believe that each of them can be attributed to the Leader of the Opposition. It was also the Leader of the Opposition who said that if he were to abandon socialism he would not be worth voting for.

Mr. Bill Michie: To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Michie: Will the Prime Minister tell the House where my constituent Joanne, who is on a vocational course, receives £35 a week, lives on her own through no choice of her own, occasionally goes without food and sits in the dark because she has no coins for the meter, fits into his citizens charter and the classless society?

The Prime Minister: I cannot comment on individual cases without all the information available in front of me. If the hon. Gentleman will provide me with all the information, I shall examine the case.

Dr. Twinn: To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

The Prime Minister: I refer my hon. Friend to the answer that I gave some moments ago.

Dr. Twinn: I thank my right hon. Friend for his clear and positive support for finding a solution in Cyprus. Will he now seek the urgent help of the President of the United States in making it clear to the new Government in Turkey that the west expects a positive and constructive contribution to the United Nations peace process from now on?

The Prime Minister: I have discussed Cyprus with President Bush on more than one occasion and we both actively supported the efforts of the United Nations Secretary-General. A settlement will require good will on both sides and I hope that the new Turkish Government will play a full, constructive and early part in the Secretary-General's renewed efforts to find a settlement. A settlement in Cyprus is long overdue.

Mr. Canavan: To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

The Prime Minister: I refer the hon. Gentleman to the answer that I gave some moments ago.

Mr. Canavan: Have the Government finally abandoned the erstwhile Tory doctrine that the rule of law must be upheld in all circumstances, now that the Attorney-General is turning a blind eye to big supermarkets breaking the Sunday trading law and as the poll tax non-payment campaign has apparently recruited the architect's daughter?

The Prime Minister: The law must be obeyed. In the case of Sunday trading, it is not at the moment clear, because of the House of Lords' ruling, what the law may be. In the case of the community charge, the law is clear. People should pay their community charge. It might have helped if the hon. Gentleman had given people a better example in that respect.

Business of the House

Dr. John Cunningham: Will the Leader of the House tell us the business for next week, please?

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): The business for next week will be as follows:
MONDAY 2 DECEMBER—Second Reading of the Transport and Works Bill.
Motion on the Industrial Training Levy (Construction Board) Order.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
TUESDAY 3 DECEMBER—Second Reading of the Prison Security Bill.
WEDNESDAY 4 DECEMBER—Motion to take note of EC documents relating to the reform of the common agricultural policy. Details will be given in the Official Report.
THURSDAY 5 DECEMBER—Opposition day (2nd allotted day). There will be a debate on an Opposition motion described as "The Economy and the Continuing Recession".
FRIDAY 6 DECEMBER—Private Members' Motions
MONDAY 9 DECEMBER—Proceedings on the Aggravated Vehicle-Taking Bill.
As I announced last Thursday, I can now confirm that European Standing Committee B will meet at 4 pm on Monday 2 December to consider European Community documents relating to indirect taxation. Details have already been given in the Official Report.

[Wednesday 4 December

Floor of the House

European Community Documents


a) 8356/90
Agricultural Production Methods


b) 7570/91
Development and Future of Common Agricultural Policy


c) 8886/91
CAP Reform: Legal Texts


d) 8950/91
CAP Reform: Legal Texts (Milk Sector)


e) 9136/91
CAP Reform: Legal Texts (Accompanying Measures)


f) 8766/91
Raw Tobacco

Reports of European Legislation Committee

a) HC 29-ii (1990–91)
b) NC 29-xxix (1990–91), and HC 29-xxx (1990–91) and HC 24-iii (1991–92)
c) HC 24-ii (1991–92)
d) HC 24-iii (1991–92)
e) HC 24-iii (1991–92)
f) HC 24-ii (1991–92).]

Dr. Cunningham: I welcome the debate on agriculture and the reform of the common agricultural policy. I thank the Leader of the House for arranging the debate which, I am sure, will be generally welcome throughout the House. May I press him to give consideration now to a debate on the fishing industry at an early date? There is widespread concern in the country—particularly in fishing port constituencies and not least in my constituency of

Copeland—about the problems facing the British fishing industry. I am sure that a debate on fishing would also be generally welcomed by hon. Members.
As today we have heard more than 900 redundancies announced by British Rail Engineering Limited and more than 400 further redundancies regrettably announced by Rolls-Royce, as well as reports of increasing difficulty, even among graduates, in finding employment and career opportunities, is it not wholly appropriate that next week we are to have a debate in Opposition time on the economy and the continuing deep and damaging recession? As that debate is to be held on Thursday, in part at least to accommodate the timetable of the Chancellor of the Exchequer, when business questions will inevitably eat into Opposition Supply time, may we have a guarantee that the Government will not make any additional statements that day?
I remind the right hon. Gentleman of my request last Thursday for a debate on the economy of London. Has he seen the reports today of the imminent report by Coopers and Lybrand Deloitte on the way in which our capital city is losing its world status due to the problems of decline, congestion and poor transport? Is he aware that such a loss damages not only London but the nation as a whole? I urge him to reconsider his decision of last week and to find Government time for a debate on the future of London and its economy.

Mr. MacGregor: I am grateful to the hon. Gentleman for his comments about the debate on the common agricultural policy. It is a timely debate. We have reached the point in negotiations on reform when it would be useful to have a debate in the House. I appreciate the difficulties that have arisen in arranging the debate next week at a time convenient for everyone. I have endeavoured to do my best and I am grateful for the hon. Gentleman's remarks about that.
I recognise the importance of fishing and we are coming to an important point in the European Community's year on fishing. I assure the hon. Gentleman that I am endeavouring to arrange an early debate, and in good time, on that point.
Regarding the hon. Gentleman's comments about next Thursday's debate, he knows that it is not possible to give a guarantee because absolutely urgent matters, about which the House may want a statement, may arise on the day. Of course, I cannot predict whether that will be the case. I shall use my best endeavours to ensure that we do not have a statement on that day, thus allowing as much time as possible after the business statement for the debate.
The debate next week will be about the economy in general, and I am sure that it will be possible then to refer to economic matters affecting London. As is clear from the business of the House just now, in the run-up to the Christmas recess there is a great deal of legislative business to be undertaken, so I cannot promise a separate debate on London's economy in Government time. Hon. Members wishing to speak on the subject will have to endeavour to use the opportunities next week.

Mr. John Browne: Will my right hon. Friend explain why, when between five and six days were given to the discussion of the Queen's Speech, only two days were given for discussion of Maastricht, and then only about a quarter of those hon. Members wishing to


speak were able to do so, and they were subject to the Whip? In the future, may we please have a three-day, open-ended debate, without the Whip?

Mr. MacGregor: It is customary to have the number of days that were allotted to the Queen's Speech debate. Part of those five days involved foreign affairs and other issues, when hon. Members could have raised the matters to which my hon. Friend refers. I endeavoured to find as much time as possible for the debate on the European Community, the run-up to Maastricht and the two intergovernmental draft treaties, and we extended the time to enable more hon. Members to get in. It is always a question of balance. I cannot give any guarantee about what we shall do in future.

Mrs. Gwyneth Dunwoody: Will the Leader of the House take urgent action to rearrange the business for Monday so that we may debate the redundancy laws which allow Rolls-Royce Motors Limited to send a motor cyclist courier scurrying around my constituency handing out redundancy notices at 11.30 at night, and British Rail Engineering Limited, a company created entirely through a bargain basement sale of taxpayers' assets, to lay off large numbers of skilled men and women without any proper consultation and without any hope of that company remaining viable in the future, if there should ever be a future in this country for trained builders?

Mr. MacGregor: While I do not wish to comment on the case to which the hon. Lady refers—because I do not know the details—I do not intend to rearrange the business for next Monday. We have important business to undertake on that day. The hon. Lady will know that questions concerning redundancies are for the company concerned. If it is felt that aspects of the procedures are not correct—I cannot comment on that because I do not know—that is clearly a matter for a tribunal.

Mr. Michael Latham: Is my right hon. Friend really happy with the state of the Sunday trading laws and the announcements made by traders in the past few days? Should not the House deal with the matter speedily? Otherwise, it will be assumed that a suspending power is operating.

Mr. MacGregor: That is certainly not the case. We tried to deal with the matter speedily with a response to a private notice question and a statement yesterday. As the Prime Minister made clear a few moments ago, the House of Lords has referred one aspect of the issue before it to the European Court of Justice and we must now wait to see what the court says. That means that the law is currently unclear, as the Prime Minister said. Once we have received the view of the European Court of Justice and the House of Lords has considered it, the Government will make recommendations and proposals on those matters. The whole House recognises some of the difficulties of the existing law, and I thought that yesterday's exchanges showed the difficulties of reaching an agreement, as we found when we tried to deal with the matter in 1986.

Mr. James Wallace: I thank the Leader of the House for saying that there will be a debate next week on agriculture, which will be welcome, and for saying that there will be a debate on fisheries before the European Council meeting.
As we are about to have a statement on NHS trust hospitals in Wales, may we expect a statement next week from the Secretary of State for Scotland on applications for NHS trust hospitals in Scotland? Many of us feel that, with overwhelming opposition from doctors, consultants, nurses, hospital staff and the communities served by those hospitals, the matter should be open and shut: those trust hospitals should not go ahead. Why is the Secretary of State delaying the matter?

Mr. MacGregor: Those are important matters and the Secretary of State for Scotland is giving proper consideration to the recommendations that have been put to him. I cannot give a precise date, but I know that my right hon. Friend is anxious to make a statement as soon as he has made a decision, which I hope will be fairly soon.

Mr. Bill Walker: Will my right hon. Friend look carefully at early-day motion 287?
[That this House notes with concern the intention of the Lord Advocate to instruct procurators fiscal generally not to prosecute men involved in homosexual activity with young males aged between 16 and 21 years; notes that this is an arbitrary lowering of the homosexual age of consent in Scotland which has not been debated by Parliament; considers that such a policy will put adolescent males and females at risk; and calls on the Secretary of State for Scotland to request the Lord Advocate to enforce the law.]
It refers to a change in the law in Scotland without it having been debated carefully in the House and a decision taken. May we have an early opportunity to debate this fundamental issue, which causes considerable concern?

Mr. MacGregor: As my hon. Friend knows, prosecution policy in Scotland is exclusively a matter for the Lord Advocate, who has directed a review of prosecution policy in Scotland in that area of the law. That review has not concluded and the Lord Advocate expects to give guidance to procurators fiscal in the near future in relation to policy on certain aspects of the prosecution of homosexual acts which are criminal offences.

Mr. William McKelvey: Will the right hon. Gentleman make a statement to the House as to whether he is making any progress in setting up the Select Committee on Scottish Affairs?

Mr. MacGregor: I have nothing to add to what I have already said on that matter in the House.

Mr. Ian Bruce: Will my right hon. Friend make an early statement on the outcome of his welcome study on the hours, procedures and facilities of the House? Has he had time to reflect on whether it may be for the good order of our proceedings to have rules about facilities such as the Tea Room and the behaviour of Members?

Mr. MacGregor: I do not think that that point comes within the Select Committee's remit, although I have noticed some comments on that subject today and I think that it is for hon. Members to observe decorum. The Committee is proceeding extremely well and working hard on its remit. Hon. Members on both sides of the House have responded considerably to the questionnaire and many of us have already given evidence. I hope that the Committee can come forward with recommendations in


good time for the House to debate them and perhaps even take decisions on them, but that is a matter for the Committee.

Mr. William Ross: Has the right hon. Gentleman's attention been drawn to the finding of a fair employment tribunal in Northern Ireland that the display of a likeness of Her Majesty at the workplace in Northern Ireland is discrimatory, and therefore illegal, and will have to be removed by the employers? Does it not follow from that finding that Her Majesty's portrait will have to be removed from all Government buildings in Northern Ireland? May we expect a statement from the Secretary of State for Northern Ireland on that?

Mr. MacGregor: I am not aware of that matter, but I will discuss it with my right hon. Friend.

Sir Anthony Grant: Has my right hon. Friend noticed in recent years the increasing use of the Order Paper for personal attacks on hon. Members and the way in which some hon. Members are interfering in the constituencies of others, a habit which is not confined to one side of the House? While I appreciate that my right hon. Friend cannot do anything on the business next week, will he join me in deploring this abuse of the Order Paper?

Mr. MacGregor: That is a matter which might be considered by other Committees of the House. I shall certainly bear in mind what my hon. Friend has said. I agree that there have always been conventions which have, on the whole, been well observed in relation to hon. Members raising issues related to other Members' constituencies.

Mr. Dave Nellist: May we have a debate next week on law and order? We could then ask why—this follows on from the question of the hon. Member for Cambridgeshire, South-West (Sir A. Grant) about hon. Members talking about other Members' constituencies—Maria Jones, who is 31 weeks pregnant, was sentenced at the beginning of this week to 60 days imprisonment for inability to pay the poll tax in Gloucestershire, despite her offers to pay £5 per week out of her £42 benefit? We are given lectures on the sanctity of the law and told that "the law is the law", but when stores such as B and Q open on a Sunday they receive letters from the Prime Minister and the chairman of the Tory party thanking them for memorable and enjoyable evenings at Conservative party conference balls. Is it not true that it is not what one does but who one knows? If the right hon. Gentleman does not like the jibe that the Government have been bought and paid for, perhaps he will arrange a debate to discuss the subject.

Mr. MacGregor: I do not know about the individual case involving the community charge, but a debate would be totally unnecessary because the hon. Gentleman's charges about the company he mentioned and the allegations that he implied are absolutely untrue. I wish to make it clear that I totally reject them. As my right hon. Friend the Prime Minister said at Question Time, the problem in relation to Sunday trading is that the law is now unclear as a result of the referral to the European

Court of Justice by the House of Lords. That is the clear distinction between Sunday trading and other issues such as the community charge, where the law is clear.

Mr. Patrick Cormack: Without wishing to associate myself with what has just been said by the hon. Member for Coventry, South-East (Mr. Nellist), may I ask my right hon. Friend to think again about a debate on Sunday trading? Whatever may not be clear, two factors are crystal clear. Does my right hon. Friend agree, first, that the intention of the law was clear and specific and, secondly, that those people who are violating the law are deliberately holding Parliament in contempt, which is intolerable?

Mr. MacGregor: I do not think that that is an accurate description of the current position. I believe that it was made clear yesterday that the law is now unclear and we are awaiting the House of Lords ruling following referral of one aspect of the issue to the European Court.

Mr. Alex Salmond: Will the Leader of the House say more about the timing of a statement on hospital opt-outs in Scotland? Is he aware that the Scottish Health Minister intimated on television in Scotland that a statement would be made before the end of the month? If the Leader of the House will not abide by that, will he at least give a guarantee that the statement will be made in public in this place and not sneaked out to one of the few remaining Tory lapdogs on the Back Benches?

Mr. MacGregor: Two things are clear: first, there will not be a statement before the end of this week and, secondly, the statement will be made in the House.

Mr. Ivor Stanbrook: Was my right hon. Friend really saying in a reply to an earlier question that, if an appeal has gone to the European Court via the House of Lords, meanwhile the law should not be enforced even when there is a determined intention to break that law on a wholesale scale between now and Christmas?

Mr. MacGregor: No, I am not saying that. I was making a comment on the uncertainty of the law. As for prosecutions under the Shops Act 1950, Parliament has made it clear that that is a matter for local authorities to decide.

Mr. Tony Banks: Is the Leader of the House aware of the pressure developing among some countries for an end to the ban by the Convention on Trade in Endangered Species on world trade in elephant ivory? Will he make it clear that Her Majesty's Government totally oppose the ending of that world trade ban? May we have a debate on elephant conservation and other animal welfare issues?

Mr. MacGregor: The Government's position is clear. It is not necessary to have a debate on the matter, but I shall draw the hon. Gentleman's point about apparent pressure from other countries to the attention of my right hon. Friend.

Mr. Andrew MacKay: I support other hon. Members' requests for a debate on Sunday trading. Is my right hon. Friend aware that many of us who failed to catch Mr. Speaker's eye on the private notice question and the statement yesterday are strongly in favour of people in a free society being able to choose whether they shop or trade on Sunday, and that we should have liked to point


out that many Opposition Members have a considerable financial interest, as they are sponsored by the Union of Shop, Distributive and Allied Workers and other unions, which should be declared before they oppose Sunday trading?

Mr. MacGregor: My hon. Friend is certainly right that hon. Members hold a variety of views on the matter. It is not necessary to have a debate on the matter to reveal once again that obvious point, which was made clear in 1986 and which is why at that time Parliament failed to change the law.

Mr. D. N. Campbell-Savours: On that matter, is it not true that the chairman of the executive committee of the national union of the Conservative party and the chairman of the Shop Hours Reform Council are one and the same person, Sir Basil Feldman? Is he not the man who is advocating all this law breaking, and is it not about time that he resigned his position from one of those bodies?

Mr. MacGregor: I should have thought that the hon. Gentleman would agree that, just as hon. Members can express their views on particular aspects of policy, so may citizens outside.

Several Hon. Members: rose——

Mr. Speaker: Order. It would be helpful if we could confine questions to business next week.

Mr. Bob Dunn: Is there a possibility of changing the business on one day next week to allow the House to debate inflation, which would give us the opportunity to congratulate the Government on their success in bringing inflation down to 3·7 per cent. while at the same time pointing out how damaging the Opposition's high spending, high taxation, high inflation policies would be, being bound to lead to massive unemployment and social discontent of the order that we had in the past?

Mr. MacGregor: I entirely agree, and I could add other matters such as the danger to employment prospects of a national minimum wage. It is not necessary to change next week's business to do that, however, as I am sure that many of my hon. Friends will be making precisely that point in the debate next Thursday.

Mr. David Winnick: May we have a statement from the Home Secretary early next week about Le Pen's proposed visit and an explanation why such a fascist, racist agitator is being allowed into Britain? Before we are given lectures about free speech, as there are laws in Britain about incitement to race hatred, should not the leader of the National Front in France be told clearly that he will not be allowed to come into Britain on the ground that it would not be conducive to the public good?

Mr. MacGregor: I think that the hon. Gentleman knows, as has been made clear before, that Mr. Le Pen's views on racial matters are totally rejected by the Government, but given his position as an elected member of the European Parliament and of the French National Assembly, to ban his entry would be a radical step. Our present view is that the evidence so far does not justify the exercise of the Home Secretary's powers of exclusion.

Mrs. Elizabeth Peacock: My right hon. Friend will be aware that the result of the present GATT negotiations, which I understand have reached a delicate stage, is important to the British textile industry. Since many people are worried about the outcome, will he find time for a debate which would give us an opportunity to put many of their views forward?

Mr. MacGregor: I well understand my hon. Friend's point in relation to the textile industry, but I am sure that she will also agree that the current GATT Uruguay round is extremely important for many other reasons. We must all hope that agreement is reached on the matter and that the round can finally be concluded by the end of this year. In the meantime, as my hon. Friend will know, all GATT parties have agreed to extend the multi-fibre arrangement to the end of 1992 on existing terms, and the EC is renewing bilateral agreements for one year on that basis, which protects the position for the time being. I shall bear in mind what my hon. Friend says, but I cannot promise a debate. We must all hope that the negotiations will have a successful outcome.

Rev. Martin Smyth: If the Leader of the House cannot make time for a debate on Sunday trading, will he make time to debate the sacking from the New York Irish People of a journalist who wrote an article condemning the attack on Musgrave Park hospital in my constituency? That would give the House an opportunity to make abundantly plain that NORAID is not a benefactor to anyone in Northern Ireland but an IRA support group. It would also give American Congressmen and others an opportunity to take a stand for civil rights in their country.

Mr. MacGregor: I have not read the article in question, but I very much agree with the hon. Gentleman's final two points. I am sure that the whole House does so, and I am glad that the hon. Gentleman had an opportunity today to make the position clear.

Mr. Michael Irvine: My right hon. Friend will be aware that at a late hour last night the House debated the European Community budget. He may not be aware that, of the 90 minutes allocated, no fewer than 65 minutes were taken up by the speeches of the two Front Bench spokesmen, leaving Back Benchers only 25 minutes to discuss that incredibly important subject. I can tell my right hon. Friend that there was a deep sense of anger among Back Benchers at the way in which our time was limited. That anger was felt not only on both sides of the Chamber, but by Euro-sceptics and Euro-integrationists alike. In the light of that, will my right hon. Friend consider making more time available during the current week to debate again the European Community budget and its implications?

Mr. MacGregor: I am sorry that some of my right hon. and hon. Friends and other right hon. and hon. Members were unable to participate in last night's debate. I will bear in mind my hon. Friend's comments about the length of speeches. I remind the House that we have just had a two-day debate on European Community matters. I followed pretty well the normal practice in relation to last night's budget debate. A slightly longer period was available last year, but on this occasion I had to bear in mind our recent two-day debate. I also took into account the fact that next week the House will have a further full


day's debate on the common agricultural policy, which takes up about 65 per cent. of the Community budget. I hope that right hon. and hon. Members who could not participate last night will be able to speak in next week's debate.

Mr. Richard Caborn: I draw the attention of the Leader of the House to early-day motion 173 on South Africa.
(That this House welcomes the convening of an all-party conference in South Africa to prepare the basis for a new democratic and non-racial constitutional order based on one person, one vote in South Africa; expresses the hope that this will lead to rapid agreement on the establishment of an interim government to rule South Africa during the period of transition; and urges Her Majesty's Government to use its influence with its partners in the European Community and the Commonwealth as well as in the United Nations to achieve an international consensus in favour of such an agreement.]
I am sure that the right hon. Gentleman and the House agree that there have been significant developments in South Africa, such as the convening of the all-party conference at the end of this week and again later in December. When Nelson Mandela attends the United Nations General Assembly next week, it may pass a consensus resolution which has existed since 1979. A similar resolution may be passed at Maastricht. Those developments are probably as significant as the release of Nelson Mandela and ought to be the subject of debate, as early-day motion 173 suggests. Will the Leader of the House allow time for that?

Mr. MacGregor: The Government's position in relation to constitutional talks and other developments is clear. We hope that they will start as soon as possible, and are encouraged that negotiations may begin before the end of this year. We shall continue, with our Community partners, to use our influence to encourage South Africa's transition to a non-racial, democratic society. As I cannot find time for a debate next week, the hon. Gentleman will have to raise that issue in other ways. Nevertheless, the Government's position has been made clear on many occasions recently in the House.

Mr. Nicholas Winterton: May I help my right hon. Friend the Leader of the House by giving him some advice on the subject of next week's business? If the House had more debates and less legislation, many of the points made to my right hon. Friend by right hon. and hon. Members in all parts of the House—for example, in relation to the EC budget debate—could be met.
I support the plea made in all parts of the House for a debate next week on Sunday trading. It is not good enough for my right hon. Friend to say that it is up to local government to decide whether to take legal action, when the big supermarket chains have threatened to take local authorities to the cleaners on costs if the authorities lose their cases. There is a Shops Act on the statute book. Until it is taken off the statute book or amended, the Government should condemn the action of those large supermarkets.

Mr. MacGregor: I have already made it clear that I do not think that there will be time for a debate on the Shops Act next week.
As for my hon. Friend's opening comments, I analysed the amount of time spent on Government legislation on the Floor of the House before I gave my personal evidence to the Procedure Committee. It was interesting to note that about 25 per cent. of the time is taken up with legislation, while 75 per cent. is devoted to general matters. At this time of year, when we are anxious to get the legislative process going and the Bills into Committee, there is rather more concentration on legislation. That is inevitable, and it places some constraint on general debates.

Mr. Harry Barnes: Has the Leader of the House seen early-day motion 270, entitled "Mr. Tindall's national insurance contributions"?
[That this House is dismayed that a person can work for 37 years and pay full national insurance contributions, be made redundant due to a pit closure, then in two subsequent years obtain full national insurance credits, topped up only with four voluntary contributions, suffer a heart attack and then be refused consideration for invalidity benefit on the grounds that he does not have sufficient contributions or credits to his name; notes that this has happened to Mr. Tindall of 69 Staniforth Avenue, Highwood Park, Eckington, Derbyshire, because he went on a fortnight's holiday in 1988 after being badly advised at an unemployment benefit office, thus cutting across three weeks during which he could otherwise have signed on for work and that he also started work in the final week of the 1988–89 tax year and thereby lost a further credit; notes that Mr. Tindall made voluntary payments to cover these four "missing" weeks but that these contributions can only be used for pension purposes and not for invalidity benefit considerations; further notes that Mr. Tindall cannot qualify for income support due to his wife's modest earnings; believes that a great injustice has been done due to the inflexibility of current Government rules; and calls for the necessary changes in the regulations forthwith.]
The motion is signed by me, and by 70 of my hon. Friends.
Mr. Tindall paid full contributions for 37 years. After being made redundant from the pit, he received full credits over two years, topped up by four voluntary contributions. After a heart attack, he is not eligible even to be considered for invalidity benefit. He cannot obtain any income allowance, because his wife is working as a nurse.
Should we not discuss the silly regulations which prevent Mr. Tindall and others in his position from being considered for invalidity and other benefits?

Mr. MacGregor: I am aware of the terms of the early-day motion. I have not had an opportunity to study the case, but I will draw the motion to the attention of my right hon. Friend the Secretary of State for Social Security.

Mrs. Teresa Gorman: Can my right hon. Friend find time soon for another debate on the question of security in Northern Ireland in the light of what has been revealed following last night's assassination attempt on the family of Dr. Laurence Kennedy, which was carried out simply because Dr. Kennedy wishes to stand as a parliamentary candidate?
It was announced this morning that the police had been prevented from questioning the four would-be assassins, who were caught red-handed, by the simple device of a solicitor's asking for a judicial review before they were


questioned. The position is serious. However much security we put into Northern Ireland in the form of efficient police action or even extra troops, it is no use if they cannot act quickly when they have a suspect in their hands.

Mr. MacGregor: I am sure that the whole House was extremely concerned to learn of last night's attack on Dr. Kennedy's home, and will wish to express its congratulations on the way in which the family responded and its relief that they escaped injury. I will draw the specific point raised by my hon. Friend to the attention of my right hon. Friend the Secretary of State for Northern Ireland.

Mr. Rhodri Morgan: Will the Leader of the House promise us a statement on Monday about the sale of the Export Credits Guarantee Department in Cardiff to its new Dutch owners, which I believe is to take place at the weekend? How many experienced civil servants are to be sent home on gardening leave pending their new employment? Will he also tell us whether the rumours flying around the Cardiff department are correct? It is said that the sale price to the new Dutch owners, and the receipts to the taxpayer, are nowhere near the £100 million to £150 million that was promised during the passage of the legislation, and may be only a peppercorn £5 million or £6 million.

Mr. MacGregor: I cannot promise a statement on Monday, because we have a heavy load of business on that day, but I shall draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Secretary of State for Trade and Industry.

Mr. John Butterfill: Will my right hon. Friend find time for a debate on constitutional affairs next week? He may be aware that hon. Members on both sides of the House are concerned about the extraordinary statement that the leader of the Liberal Democrat party made last week, when he said that his party no longer accepted the sovereignty of Parliament.

Mr. MacGregor: My hon. Friend is referring, I suspect, to a referendum. The position of the Government and, I think, of the Labour party has been made clear on that. My hon. Friend makes an interesting point on the stance that the Liberal Democrats appear to have taken. [HON. MEMBERS: "Where are they?"] Unfortunately, none of them is here to explain their stance, but I hope that there will be opportunities to explore the matter in forthcoming weeks.

Mr. Andrew Mitchell: Has my right hon. Friend noticed how the appetite of the Opposition Front Bench for debates on health care has diminished sharply as the good news continues to roll in about national health service trusts giving better care for patients and better value for money in the health service? Is he aware that senior medical staff at Queen's medical centre in Nottingham voted overwhelmingly to try to obtain trust status in the next wave, thus defeating Labour's disgraceful smears and scares which sought deliberately to frighten elderly and vulnerable people into believing falsehoods about the NHS?

Mr. MacGregor: I have, indeed, noticed the point that my hon. Friend makes and he is entirely right about the success of our reforms. I hope that we shall find many other opportunities—perhaps very soon—to continue to convey the good news.

Mr. John Marshall: May I support the plea for an early debate on London? Is my right hon. Friend aware that many Conservative Members would like to point out which London councils have the highest community charges, the most uncollected rent, the worst school results and the largest number of empty council houses and that the Government are giving much more money to London Transport than the Labour-controlled GLC ever gave?

Mr. MacGregor: I entirely agree with my hon. Friend, who may be able to make some of those points in next week's debate on the economy. They are certainly relevant to the economy in London and he is right to draw attention to the damaging policies of Labour councils.

Mr. Anthony Coombs: Further to the request of my hon. Friend the Member for Gedling (Mr. Mitchell), may we discuss at an early opportunity the progress on hospital trust status and on the Government's health reforms? That would give me an opportunity to praise my own excellent health authority, which is not only one of the 30 most efficient in the country and has two hospitals applying for phase 3 trust status, but plans to amalgamate with nearby Bromsgrove health authority to diminish administrative costs, reduce duplication and put the money saved into patient care.

Mr. MacGregor: I am glad that my hon. Friend has been able to make that point. I hope to find opportunities for him to make the same points about his constituency and for other right hon. and hon. Friends to make similar points about theirs.

National Health Service (Wales)

The Secretary of State for Wales (Mr. David Hunt): With permission, Mr. Speaker, I should like to make a statement on the national health service in Wales.
I am pleased to be able to announce to the House next year's Government expenditure on health and personal social services in Wales. Funding will increase by a massive £186 million, taking national health service spending in Wales to further record levels in real terms. My proposals mean that national health service expenditure in Wales will be boosted to £651 a year for every man, woman and child in Wales, or, put another way, more than £2,600 for a family of four.
The Government are determined to ensure that health in Wales is accorded the highest possible priority. The figures reflect our personal commitment—and my commitment in particular—to secure the investment for health care in Wales that will enable the national health service to go forward from strength to strength.
Our commitment to the national health service cannot be clearer. We are giving it the support that it needs to move forward quickly on the imaginative and exciting course on which it is embarked. But that support is not limited just to words: I am backing my judgment with cash and at record levels.
Planned provision for the national health service in Wales will increase to £1,877 million next year. That compares with the figure in 1979–80 of £481 million. That is £1,877 million against £481 million—the record speaks for itself. Of the £1,877 million, £1,420 million is earmarked for hospital, community health and related services. This includes the costs arising from Welsh patients who travel to England for treatment following the new charging arrangements.
The new money that the Government are making available will provide the national health service in Wales with an increase of 11·1 per cent. on comparable expenditure plans for this year. In addition, health authorities will keep as a minimum an extra £13 million generated by cash-releasing efficiency savings.
I expect to announce allocations to health authorities next month, but I can say today that my proposals will enable them to continue to plan with confidence for the health care needs of the people of Wales. They will be in a position to increase activity significantly next year and this will maintain downward pressure on waiting times. In addition, capital allocations will provide for the building of new hospitals and the uprating and expansion of existing units.
I also wish to refer to the development of national health service trusts in Wales. Pembrokeshire health authority formally applied to become a national health service trust on 16 July and the statutory consultation period ended on 31 October. Taking account of the views received, alongside the individual merits of the application, I have decided to establish the Pembrokeshire national health service trust with an operational date of 1 April 1992. The order giving effect to this decision has been made today and the trust will commence "shadow" running on 16 December.
Pembrokeshire will be the first trust in Wales and, I believe, clearly shows the way forward for the future

delivery of health care. I am on record with my pledge that applications for trust status in Wales will not be approved unless I personally am convinced that patients will benefit.
Local people can be justifiably proud of the NHS in Pembrokeshire and I am confident that the trust will generate even stronger links within the community in responding to present and future health care needs. The local identity of the national health service trust will be reinforced by a board drawn from local people and led by Mr. A. J. G. Bowen.
Elsewhere in Wales, NHS trusts are progressively being seen as the natural organisational model for patient care. They bring the management of health services closer to the local communities and respond directly to local needs. When I met health authority chairmen last week, they reported that they expected a significant number of expressions of interest to be lodged to become national health service trusts in 1993. They expect that they will account for nearly half our major patient care providers in Wales. I expect shortly to announce the details of hospitals and other health service units invited to proceed to draw up applications.
As part of the consultative arrangements on the trust application, I had proposed separately the creation of a new West Wales health authority. In the form suggested, this proposal had only limited support locally and, in recognition of this, I have decided not to proceed with the new authority. As a consequence, Pembrokeshire and East Dyfed health authorities will be retained, with Captain Phillips remaining as chairman of Pembrokeshire. However, I shall be looking to both health authorities and the Dyfed family health services authority to work closely together in developing clear strategies to identify and then meet local needs. The residents of Pembrokeshire will expect no less.
A further growing development in the NHS in Wales is the creation of GP fund holders. I have already given details of the seven practices established as fund holders in April this year. I can now tell the House that a further 19 practices have successfully applied for fund-holding status from 1 April 1992. Final decisions rest with the GPs involved, but I will provide in due course details of the practices which will formally become GP fund holders in 1992.
Those developments and the extra resources that I announced earlier will enable the NHS in Wales to respond positively to the challenges of the future. The Principality can look forward with confidence, secure in the knowledge that our vision of the future is founded on a greater range of services, more opportunities for individual choice, and even higher standards of care for everyone.

Mr. Barry Jones: We know what the right hon. Gentleman is attempting. He is putting his sugared financial announcement on a bitter trust pill. On the finances, we have seen it all before. During the run-in to the general election there is a little more money, but do not Conservative cuts come after a general election victory, if they have one?
The key part of the statement was about trusts. I remind the right hon. Gentleman that more than 2,500 people are waiting longer than one month for urgent surgery—more than 12,000 are waiting more than a year


—and that more than 86,000 are waiting for a first out-patient appointment. That is after the Conservative Government have been in power for 12 years.
The right hon. Gentleman has just said:
Pembrokeshire will be the first trust in Wales and, I believe, clearly shows the way forward for the future delivery of health care.
With that sentence he threatens Wales. It is symbolic. Clearly, hospital trusts are to be the norm if the Government are re-elected.
The statement that we have just heard is one of the most disgraceful and extraordinary ever to be made by a Secretary of State for Wales. I remind the right hon. Gentleman that time and again the Conservative vision of a commercialised internal market in patients with opt-out trust hospitals competing for patient contracts has always been rejected by the people of Wales. Why, even with the spectre of general election annihilation before them, are Welsh Office Ministers persisting with that discredited plan?
The statement shows again that the national health service is not safe in Conservative hands. Does the Secretary of State accept that the opt-out proposals for a Pembrokeshire trust are nothing more than an elaborate con job paid for by a £50,000 Welsh Office sweetener? Will he admit that the trust, and any other trusts, will be unaccountable to the local community and will take, in secrecy, behind closed doors, crucial decisions on health care for Pembrokeshire? Does the right hon. Gentleman understand that the process of creating trusts in Wales will be stopped by an incoming Labour Secretary of State for Wales and that any hospital that has already opted out before the general election will be brought back under the management of the local health authority?
What the right hon. Gentleman has said today will never be accepted by the people of Wales. When the general election takes place, the right hon. Gentleman and his contemptible proposals will be swept away.

Mr. Hunt: On the first point about funding, the hon. Gentleman said that he had seen it all before. He has seen it all before under this Government, but he did not see it when Labour was last in office. I remind him of the figures. In 1979–80, we spent in the national health service——

Mr. Win Griffiths: Give us the waiting list figures.

Mr. Hunt: I will come to those.
In 1979–80, we spent in the national health service £170 for every man, woman and child in Wales. If spending this year was at the same level, uprated to take account of inflation, we would now be spending at the rate of £392 for every man, woman and child. The actual figure this year is £614 and, under my proposals, it will go up to £651[Interruption.] Opposition Members do not like the figures, but they cannot dispute that the figure for spending in 1979–80 was £481 million in cash terms. My announcement increases it in real terms by 60 per cent.
Under the previous Labour Government, the number of new out-patients treated fell by 3 per cent. Under this Government, the increase between 1979 and 1990–91 has been 29 per cent. Between 1974 and 1979 under Labour, the number of in-patient cases went up by 6 per cent. Under this Government, the figure has gone up by 39 per cent. and the number of patients being treated is now at a record level.
The hon. Gentleman said that the first trust threatened Wales and he used the phrase "opt out". We had all that in the Monmouth by-election. That phrase has scared many people in Wales. Opposition Members were more interested in scaring than in caring. I visited Nevill Hall hospital last week, where I found that the people are very satisfied with the national health service in Wales. I reminded people that in 1979, 1983 and 1987, the Labour party said that the health service was not safe in the hands of a Conservative Government. The latest poll shows that 93 per cent. of people are satisfied with the health service.
Of course we must not see hospitals opting out of the national health service; that has never been the intention. I want national health service trusts which mean that management gets closer to the people. The hon. Gentleman said that the trust was unpopular. Since my visit to Nevill Hall, there has been a by-election in a Labour seat in Abergavenny and the seat has been won by the Conservatives. That carries a message to the Labour party.

Mr. Gwilym Jones: The extra money for the health service in Wales is an inflation-busting announcement which will be welcomed in the Principality. It will mean that our very good health service will be able to expand in quality and in quantity.
I welcome the trust status for Pembrokeshire. We have heard the most disgraceful claims, made for electoral reasons, that hospitals will close or basic health facilities will be denied, but the people who have really studied the matter in the interests of the patients—the community health council, the staff and the doctors—have come out in favour of trust status. That proves that the opportunity for trust status means that decisions will be taken locally in the interests of local people.

Mr. Hunt: I greatly welcome what my hon. Friend said about funding and I have cited the revenue figures. Let us look at what happened to capital in the health service under Labour. Whereas capital has increased substantially under this Government, in real terms between 1974–75 and 1979–80 it went down by £11·7 million. No wonder Opposition Members are so silent.
As for trusts, I totally agree with my hon. Friend, but I am not prepared to approve an application for a unit, hospital or an authority to become a national health service trust unless I am satisfied that that will lead to better and more local management and a better range and quality of service to patients, with clinicians involved in key management posts and better patient care.

Mr. Richard Livsey: Does the Secretary of State's announcement on NHS trusts for Pembrokeshire and possible proposals that may come from elsewhere in Wales show that we are to have a two-tier health service—those who get the service and those who get a second-class service? At Nevill Hall hospital, which also serves my constituency, the consultants and staff are opposed to trust status. Will the right hon. Gentleman tell us whether he has received any proposals from that hospital for NHS trust status and whether he will grant it?

Mr. Hunt: I am concerned that the Liberal party has not welcomed the funding announcement. The hon. Member for Brecon and Radnor (Mr. Livsey) has not said anything at all about it. Members of Parliament always


call for more money, but, when I come to the House and bring record sums with me, I get no welcome. On the trust point, of course we will not have a two-tier health service in Wales. I want every national health service trust to remain within the family of the national health service. I want every national health service trust to provide patient care which will remain free at the point of delivery. I want every national health service trust to remain funded out of general taxation as it is at present. That is the position. That is not a two-tier service; it is a better service.

Sir Anthony Meyer: Is it not well nigh incredible that, after the manifest collapse of command economies in eastern Europe—a collapse that was precipitated by the absence of any market mechanism to demonstrate where resources are needed—the Labour party should continue to oppose the use of market mechanisms within a truly free national health service in order to show precisely where resources can best be used? Did my right hon. Friend, during his triumphantly successful visit to Ysbyty Glan Clwyd in my constituency, note the general satisfaction of patients, staff and doctors with the changes that have been brought about, and did he note the utter baselessness of the charges that have been brought by the National Union of Public Employees about changes in that hospital?

Mr. Hunt: I greatly welcome what my hon. Friend said. I enjoyed my visit to Ysbyty Glan Clwyd yesterday. I found a very positive attitude by all the people whom I met and I met many patients. I opened the new foyer, which was built in response to a questionnaire that the hospital had carried out among patients to see what they wanted to be improved.

Mr. Barry Jones: It is here in this newspaper.

Mr. Hunt: No, I am now talking about the truth that my hon. Friend has put forward. That foyer was very much what the public wanted. I provided special additional money for it. The league of friends, the local volunteers with whom I was extremely impressed——

Mr. Jones: rose——

Mr. Hunt: The hon. Gentleman should listen and pay tribute to the league of friends. The league of friends raised £50,000 specifically to improve the foyer. I hope that the hon. Gentleman visits that hospital, too, because he will find general satisfaction. The surgical ward is now scheduled for redecoration. At that hospital, several hundred more operations have been performed than at this time last year.

Mr. Denzil Davies: The Secretary of State mentioned that his aim was to bring management closer to the people. He also announced that East Dyfed health authority would remain and that there would be no West Wales health authority. Is he aware that, as a result of the Government's vindictive and often partisan appointments to health authority boards, there is no representative, and has not been for some time, from the Lanelli area on East Dyfed health authority, yet Llanelli is the only major industrial area in all west Wales? Will the right hon. Gentleman now make good his statement about

management being closer to the people and appoint someone from the Llanelli area to the board of East Dyfed health authority?

Mr. Hunt: We have to have the most able people serving on the health authorities. If the hon. Gentleman can provide any names, I am perfectly prepared to consider them—[Interruption.] Well, I shall simply tell the hon. Gentleman that under the last Labour Government—[HON. MEMBERS: "Disgraceful."] Yes, it is pretty disgraceful for the hon. Gentleman not to pay tribute to the fact that, thanks to the Conservatives, there is a new hospital in Llanelli, the Prince Philip hospital.

Mr. Ieuan Wyn Jones (Ynys Môn): The right hon. Gentleman chided the Liberal party for not welcoming his increased expenditure, but will he tell the House the comparable figure for actual expenditure last year, because he compared the figure that he announced today with last year's expenditure plans? Will he use the actual figure for the comparison to see whether that shows an 11 per cent. increase? Does he accept that, whatever he says today, he and his party have lost the political debate over the future of the health service in Wales and that, whether he likes it or not, his announcement today will be seen as extremely divisive? Does he accept that the public see the setting up of national health service trusts as one step away from privatisation? Is not that the case?

Mr. Hunt: No, not at all. I suppose, however, that I have gained something because one Opposition Member actually said the other day that the proposals are halfway to privatisation, so I have managed to move the Opposition halfway. I hope, however, that hon. Members will soon realise that this has nothing to do with privatisation. As far as I am concerned—as far as the Government are concerned—the health service will not be privatised. The hon. Gentleman said that I chided the Liberal party, but I now chide Plaid Cymru for not welcoming my announcement——

Mr. Ieuan Wyn Jones: I did welcome the announcement—

Mr. Hunt: No; if the hon. Gentleman looks at Hansard he will see that he did not actually say that he welcomed it. He questioned some of the figures. The 11·1 per cent. is an increase on the provision for this year and an 8·2 per cent. increase on the outturn. When the hon. Gentleman bears in mind the fact that inflation is 3·7 per cent. and notes the increase since 1979–80, he will recognise that these are substantial increases which represent 60 per cent. more in real terms.

Mr. Alan W. Williams: The Secretary of State may not realise that I regularly read the Pembrokeshire newspapers which, during the past few months, have contained many letters about the trust application, most of which—in fact, the large majority—have been hostile to it. May I draw the right hon. Gentleman's attention to an opinion poll that was conducted by the Western Telegraph last August, which showed that 85 per cent. of that newspaper's readers opposed the Pembrokeshire trust application? Why does not the Secretary of State listen to the people of Pembrokeshire? Does he realise that his foolish decision


today will cost the Under-Secretary of State, the hon. Member for Pembroke (Mr. Bennett), his seat at the next election?

Mr. Hunt: I, too, read the Pembrokeshire newspapers and constantly see praise of my hon. Friend the Under-Secretary of State—[HON. MEMBERS: "In his own column."]—not only in his own column, but elsewhere in the newspapers. I am keeping a careful watch on the situation to which the hon. Gentleman has referred and I hope that he will recognise that there are polls and polls. When the legislation was going through the House, there was a long debate about whether local polls should be held and the House decided against that. Of course, we must take the right decision for the sake of all the patients in the health service. I sincerely believe that what I have announced today is a move in that direction.

Mr. Donald Anderson: The Secretary of State will know that the opt-out process for schools involved at least a partial, if flawed, consultation process. Is not he ashamed that there is no provision at all in this process for accountability or consultation? Is he aware—he must be—that we are already approaching a general election campaign and that the hospitals that have decided to bow to Welsh Office pressure on this matter are effectively intervening in a partisan way in what will be one of the major issues of that general election campaign? Will he therefore give an undertaking that Nevill Hall, which, despite the right hon. Gentleman's visit, has decided not to seek opt-out trust status, and Morriston hospital and others, which have not set out recklessly on that path, will not face any reprisals from the Conservative party until the election?

Mr. Hunt: There were about 10 wrong assertions in what the hon. Gentleman just said. I cannot possibly deal with them all if I am to allow other people to ask questions. I wish that the hon. Gentleman would stop using the phrase "opt-out". A leaflet is going round, issued by Support the Wales TUC, called "Defend the NHS". It says:
Opting out. Throw out opt-out.
On the second page it says:
Street ballots are to be held across West Glamorgan as a means of offering the public the opportunity to show their opposition to opting out.
That sort of ballot is bogus.
There is no opting out, I am prepared to approve a national health service trust only as long as I am satisfied that it will lead to better patient care and that it will remain within the national health service. There is no pressure from the Welsh Office. It is up to the local hospital to reach the decision.

Mr. Geraint Howells: I am sure that the Secretary of State is aware that I have opposed his trust proposals for a long time and I believe that the majority of my constituents in North Pembrokeshire are against such a trust. Now that the Secretary of State has made the decision, I wish the trust the best of luck in the years to come in the interests of the people of Pembrokeshire. I compliment the staff, the nurses and everyone involved with Withybush hospital.
Can the Secretary of State give an assurance to the rest of the people in Dyfed that he will not form another trust

until the Pembrokeshire trust has completed a three-year trial run to determine whether the trust status now on offer to the people of Pembrokeshire is a success?

Mr. Hunt: I accept the first part of what the hon. Gentleman said. It was a recognition of the reality. As I understand it, the local community health council in Pembrokeshire decided to support the application for NHS trust status. So did the staff and the consultants. The hon. Member for Swansea, East (Mr. Anderson) talked about a lack of consultation, but there was a clear expression of view.
The hon. Member for Ceredigion and Pembroke, North (Mr. Howells) talked about the future. I sincerely believe that NHS trusts are the way forward. They bring management closer to the people and the hospital. They allow hospitals to be independent of any outside bureaucracy, to make their own decisions and to have their own budget. That is why I certainly would not block any further applications.

Mr. Win Griffiths: Obviously, any extra money for the health service or any other public service, in Wales or anywhere, is to be welcomed. What we find most difficult to accept is the sanctimonious self-congratulation and the hyping up of the extent of the increase in the money provided. Of course, we know that the figures are bogus. For example, how much of the increase in spending is simply due to the extra number of old people and people getting older who need treatment in this decade compared with the 1970s? That is a significant part of the increase.
Secondly——

Mr. Speaker: One question please.

Mr. Hunt: I have already answered that point. Of course, some of the increase is to take account of increased need. I am arguing against the Labour party's constant accusations that the Conservative Government are making cuts. I analyse the figures on a per capita basis because that is one of the fairest ways. That we spent £170 per capita in 1979 is without challenge. It is the actual cash figure. Taking inflation into account, the figure would be £392 today. It is actually £614. It will be even higher as a result of my announcement today.

Mr. Gareth Wardell: As a result of the increase in funding that the Secretary of State announced today, can he guarantee that this year it will be possible to carry out 1,200 open heart operations in Wales? A commitment was made as long ago as 1984 by his predecessor, yet fewer than 800 operations are being carried out. If GP fund holders are able to buy that or any other service, will the Secretary of State guarantee that in no unit in Wales will it be possible for a consultant surgeon to discriminate against a non-fund holding GP in favour of a GP fund holder who has referred his or her patient to the hospital?

Mr. Hunt: On heart operations, I cannot give the guarantee for which the hon. Gentleman asked, but all district health authorities in Wales are signed up to reduce waiting lists and waiting times in this financial year and to continue that process in succeeding years. The latest evidence shows that activity levels in Wales will be 4 to 5 per cent. up on 1990–91 and that health authorities will meet the "agenda for action" targets for patients waiting more than one year for in-patient care, which is only 19 per cent. but is still too high. We want some improvement. We


want to come close to the target for out-patients waiting more than three months for an appointment, which is 28 per cent.

Several Hon. Members: rose——

Mr. Speaker: Mr.…

Dr. Kim Howells: Kim Howells.

Mr. Speaker: I am sorry.

Dr. Howells: I am a shy and retiring violet.
Will the provision that has been made for extra funding be able to help the Taff Ely and Rhondda districts of Mid Glamorgan health authority, which is £900,000 overspent, and which faces the closure of wards in the coming winter, including ward 11, a children's ward, which has just been refurbished? The Secretary of State knows very well that that ward will soon be full of children with asthma and bronchial problems. How are they to manage if that money is not made available to them?

Mr. Hunt: Did I hear the hon. Gentleman say that he was retiring?

Dr. Howells: A retiring violet.

Mr. Hunt: On the serious remarks that he made, obviously it is up to the health authority to manage the budget that it receives. He should take up those areas of concern with the chairman of his health authority. However, will he again recognise that we are talking about record levels of funding? Today's announcement means an even higher record than before.

Mr. Peter Hain: The Secretary of State for Wales is busily carving up the health service in Wales like a Christmas turkey. Is he aware that thousands of my constituents are flooding me with signatures on petitions which oppose the opting out of Neath hospital and its registration of an interest to start the application process? Will he arrange for a ballot to be conducted by Neath borough council and let the people of Neath have a voice in whether their hospital should opt out?

Mr. Hunt: May I remind the hon. Gentleman that not long ago he was congratulating me on having announced the new hospital in Neath. He cannot suddenly move from one extreme, which I welcome, to another, which I do not. Or, I suppose he can.
On ballots, I, too, would vote against opting out of the NHS, but that is not what is on the agenda and never has been.

Mr. Martyn Jones: Will this new money—if it is new and is not vired from some other budget—help waiting lists, bearing in mind the fact that the right hon. Gentleman mentioned that the surgical ward in Ysbyty Glan Clwyd is to be closed for redecoration for six months? That is probably an inefficient way to decorate a ward. The surgical team who face that ward closure have been successful in reducing waiting lists until now, when the money has run out. Will the money help? Which waiting lists will it tackle? One gentleman in my constituency is having to wait 18 months to get on a waiting list. According to my reckoning, there are two

waiting lists. Which one will it stop—the waiting to get on a waiting list or the 18 months' wait that that man has to face when he gets there?

Mr. Hunt: I do not know what point the hon. Gentleman is making. Today I announced overall funding for the NHS in Wales. I must admit to the House that I have put much more money into the NHS than was perhaps originally expected because I believe that that, and better patient care, are among my highest priorities as Secretary of State. I was determined to fulfil that obligation with the announcement. Having secured those additional funds, I must sit down and work out how to allocate them between health authorities. The hon. Gentleman will know about the extra millions of pounds that we have put into the waiting lists initiative. However, the purpose of the funding package that I announced is to reduce waiting times throughout Wales.

Mr. Alex Carlile: Will the right hon. Gentleman confirm that the surest way to acquire a new hospital is to cause a by-election? Will he also agree that he still has a good deal of arguing to do to convince the people of Wales that the creation of a large number of hospital trusts is motivated by patients' interests rather than by his political beliefs?

Mr. Hunt: I wonder whether there is something I should know as to why the hon. and learned Gentleman is so favourably disposed towards by-elections. We would rise to the occasion with Jeanie France Heyhurst if he decided to step down. There would be an extremely good by-election campaign.
On national health trusts, I will approve an application only provided that the hospital, the unit and the authority will remain within the family of the NHS. There is no dogma here. I am proud of my commitment to the health service, which is evidenced by the record level of resources that we have announced today.

Dr. John Marek: I can well believe that the national health service needs more money in Wales because there are many more administrators, computer operators and accountants in the service. No doubt the opted-out trusts will ensure that their board members pay themselves inflated salaries. Nevertheless, I welcome the extra money, if it is genuinely new money and is not taken from some other budget. What is the difference between the coming year, 1992, and 1987, 1983 and 1979, when more money was promised by the Conservative party and promises were made, only to be cruelly withdrawn after the elections in those years?

Mr. Hunt: There was just one little thing that the hon. Gentleman left out—to welcome the fact that, thanks to the Conservative Government, Wrexham Maelor hospital was built. That is something of which we are very proud.
On funding, of course this is extra cash for the NHS. The money will be allocated to the health authorities as soon as I am able to make further announcements. It will be greatly to the benefit of the health service and to patients. We have published a patients charter, we believe in better patient care, and what I have announced will greatly assist in bringing about that objective.

Mr. Alan Williams: Does not the Secretary of State recognise that the 11·1 per cent. increase not only becomes the 8·2 per cent. that he admitted to


when it is measured against expenditure, but becomes about 2 per cent. when measured against the real rate of inflation within the NHS and disappears altogether when care in the community is taken into account?
On an important constitutional point—I hope that he will take this seriously—whatever happens after the election we are in the dying months of this Parliament. There is a bitter doctrinal argument between the parties on trust status. Will he give an assurance that, whatever happens in present consultations on further trusts—I shall avoid the emotive term "opt-out"—and whatever their conclusion, he will leave it so that the Government appointed after the election can make a decision about whether there will be more trusts?

Mr. Hunt: Since 1979–80 funding for the NHS has increased in real terms by 60 per cent. That is a marvellous statistic and one which I shall use during the next general election.

Mr. Win Griffiths: That is not in real terms.

Mr. Hunt: No, it is a real-terms increase of 60 per cent. When the right hon. Member for Swansea, West (Mr. Williams) was in government, funding increased by nowhere near that figure and capital spending decreased.
On trusts, we do not hear as much opposition in England to NHS trusts now. It has gone rather quiet because trusts have been rather successful. In Wirral the local Labour party first opposed every NHS application—that was at the behest of the unions, which were equally opposing them. Now throughout Wirral one will find general approval of trusts and they are nowhere near the party political football that the Labour party in Wales is still trying to suggest.

Mr. Alun Michael: Does the Secretary of State realise that this is not so much a statement as a press release? Does he not know that the increase about which he told us is inadequate to meet the needs, especially with the increasing numbers of the elderly in our population, and year after year falls back compared with all comparable countries? Why does so much money go on gimmicks, such as the £203,000 on his so-called charter for health in Wales, with cash going to a firm in Northampton and an appalling and unproductive paper chase in this so-called market in care?
Cannot the Secretary of State understand the message from the 93 per cent. of people in Wales who are satisfied with the NHS and do not want the muddle and meddle of his trusts and opt-out policy? What is unpopular is the proposal to take the health service in Pembrokeshire into

a trust. It is as unpopular in Pembrokeshire as is the hon. Member for Pembroke (Mr. Bennett), the obsessed architect of all that we despise about Conservative policies on health in Wales.
Does the Secretary of State accept that the Conservatives broke the consensus on health in Wales and that the trust idea will and must be scrapped—if not by him, by the people of Wales at the general election?

Mr. Hunt: There was some sweet music among the discordant notes. In previous health service debates the hon. Gentleman has come to the Dispatch Box and said that there have been cuts in the health service and there was great dissatisfaction in Wales with the Conservatives. Now is a wonderful moment. He has come to the Dispatch Box and said that 93 per cent. of the people in Wales are satisfied with the Conservative administration of the health service.

Mr. Michael: No, I did not say that.

Mr. Hunt: The hon. Gentleman did not include the words, "Conservative administration or. He said that 93 per cent. were satisfied with the national health service in Wales. I welcome that.
On the hon. Gentleman's discordant notes, I want to ensure that the record levels of funding now announced are targeted in the best possible way for the patients. I want to see a health service that is better managed and where the staff are paid properly.
I have one last fact and statistic for the House. When Labour was last in power, the pay of nurses, midwives and health visitors fell in real terms by 21·1 per cent. and of hospital doctors and dentists by 9·9 per cent. Under this Government, from 1979 to 1991 pay has increased for nurses, midwives and health visitors by 48·7 per cent. and for hospital doctors and dentists by 28·7 per cent. No wonder the hon. Gentleman says that the Conservative Government are running the health service well. We are determined to do even better and my announcement today will enable us to do so.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments, &amp;c.).

BROADCASTING

That the draft Broadcasting (Programme Contractors' Additional Payments) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Patnick.]

Question agreed to.

Welsh Development Agency Bill

Order for Second Reading read.

The Secretary of State for Wales (Mr. David Hunt): I beg to move, That the Bill be now read a Second time.
The purpose of the Bill, in particular clause 1, is to increase the statutory financial limit for the Welsh Development Agency from the present level of £700 million to £950 million. The limit was last raised by the Welsh Development Agency Act 1988, and present forecasts suggest that the limit will be reached during 1992–93. Therefore, it is necessary to raise the limit now, so as not to inhibit the agency's contribution to the redevelopment of the Welsh economy.
Under section 18 of the Welsh Development Act 1975, a number of items count towards the financial limit. First, there are the agency's general external borrowings, mainly from the national loans fund. Secondly, there are agency and Treasury guarantees. Thirdly, there are overseas borrowings from, for example, the European Coal and Steel Community. The largest element, however, comprises the grant in aid, less administrative expenses, together with public dividend capital issues, both of which I make available annually to the agency.
It is customary when seeking parliamentary approval for increasing a financial limit to set a figure which will last for about five years. It is not customary to set it too high because this occasion gives us an opportunity to review the agency's activities and, in effect, have another debate on Welsh matters.
I see the hon. Member for Caernarfon (Mr. Wigley) in his seat. A group of English Members who were leaving the Chamber said to me, "You don't need a ruddy Welsh Assembly—you've turned this Parliament into a Welsh Parliament". This week, we have had a debate on the Cardiff Bay Barrage Bill, an announcement on the health service in Wales and now a debate on the WDA, and next Monday we have Welsh questions.

Mr. Dafydd Wigley: The Secretary of State has tempted me to my feet, and I apologise for my voice. Does he agree that, if this is to be seen as a Welsh Parliament, we can have votes on matters relating to Wales restricted to Welsh Members?

Mr. Hunt: The hon. Gentleman should not be so insular. I was merely reporting what was said to me; I did not give my views.

Mr. Ieuan Wyn Jones: What are they?

Mr. Hunt: I do not think that this has become a Welsh Parliament, but it is the mother of Parliaments. Hon. Gentlemen can intervene on any aspect of the agency's affairs, and I am happy to respond to any questions.
As I said, it is customary to cover a five-year period, so I propose that the limit should be £950 million. I should add, however, that this is a purely technical measure, with no implications for spending or policy decisions in future years. Such decisions will be taken in the normal way.
The agency's main aims are to further the economic development of Wales, to enhance the international competitiveness of Welsh business and to improve the environment of Wales. It pursues its objectives through a wide range of activities. They include the provision of modern factories and workshops, the promotion of inward

investment and new technology, the provision of business advice and venture capital, land reclamation and, increasingly, urban renewal and environmental improvement. The goal is a dynamic, self-sustaining, private sector economy in Wales.
In recent years, we have seen the emergence of a new Wales—the transformation of our country. The process is not yet complete, but the changes have been profound and will be of lasting significance—certainly for Wales, but also more widely. As racently as 1979, Wales was dominated by declining nationalised industries. The inevitable closures saw unemployment rise from 67,000 in 1979 to 167,000 by 1986—more than doubling the rate of unemployment to 14 per cent. In parts of industrial Wales, people were faced with a stark legacy from their industrial past: high unemployment, a declining population, industrial dereliction and environmental pollution.
There has now been a dramatic improvement. Unemployment fell rapidly—it declined for 47 consecutive months—until the recent recessionary pressures in the United Kingdom economy took effect. Between 1985 and 1989, seasonally adjusted employment halved. The average rate of unemployment in Wales is now 9·2 per cent. I am pleased that unemployment in Wales fell again last month, but I remain to be convinced that we have moved into that trend again—I greatly hope so. There has been much growth in employment opportunities in the service sector as well as manufacturing.

Mr. Ieuan Wyn Jones: The Secretary of State is about to say that the WDA has been successful in attracting inward investment into the traditionally industrial parts of Wales, especially the south-east and north-east. I concur with that view. Will he confirm that it is the agency's remit to attract inward investment to areas that still have large pockets of unemployment, such as Holyhead and Fishguard, and that it is considering that matter carefully?

Mr. Hunt: Yes, I do so confirm. As the hon. Gentleman knows, my right hon. Friend the Minister of State kindly responded to a call that I received from a meeting in Anglesey, at which the hon. Gentleman was present, to appoint a supremo—someone to co-ordinate overall activity—to regenerate the economy of Anglesey. I am delighted to hear from my right hon. Friend that the WDA is spearheading a great deal of activity, and I am sure that he will wish to enlarge on those points later in the debate.
The index of output of manufacturing industries in Wales showed between 1985 and 1989 growth of over 30 per cent., compared with 15 per cent. for the United Kingdom as a whole. The numbers of firms in Wales in production industry, as shown by VAT registrations, rose by 64 per cent. in the same period, which is more than twice the United Kingdom average. The economy has diversified and is more flexible and robust, with tremendous potential for growth.
Those achievements represent a great tribute to the resilience and strength of the Welsh people. There is no doubt that Government policies in Wales and the work of Government Departments and agencies, such as the WDA, have played a crucial role, and continue to do so. Although I recognise the continuing difficulties, the Welsh economy is better placed than ever before to move forward to renewed growth.
I come to the contribution made by the WDA. It has been necessary to ensure that the agency is properly


funded to do the job. Since we came to office in 1979, the total gross expenditure of the Welsh Development Agency, at today's prices, has just gone through the £1 billion barrier. Those resources have been used to tremendous effect. In the last year alone, for example, the agency's direct factory-building programme provided an additional 1·2 million sq. ft. of industrial and commercial floor space. When fully let, that will provide space for about 3,500 jobs.

Mr. Win Griffiths: The Secretary of State speaks of the role of the WDA as a factory builder and, in that context, as a landlord. Will he ask the WDA to review its policy of selling off large tracts of its factories to major real estate agents rather than directly to the tenants? Is he aware that many tenants have been dissatisfied to find that the leases they held from the WDA have been sold to companies that have no connection with Wales and without them having been given the opportunity to buy them for themselves? Will he persuade the WDA to do otherwise?

Mr. Hunt: The WDA currently holds about 2,000 factories. Over 40,000 people are employed in them, so it is an important landlord, as the hon. Gentleman points out. In the last five years, the agency has conducted programme of sales. It would be wrong for me to restrict the market, because the agency has raised more than £80 million from factory sales to private sector investors and individual tenants, and has reinvested the proceeds in Wales.

Mr. Ted Rowlands: It is all very well for the right hon. Gentleman to talk about a budget of perhaps £166 million, but in the coming three years the grant in aid from the Welsh Office will drop from £80 million to £60 million. The maintenance of the budget depends on two forecasts—a huge hike in factory rents being forced on many tenants and a large sale of factory space. If one or both of those fails to occur on the scale projected, may we be assured that the Government will make up the difference to maintain the overall budget of the WDA?

Mr. Hunt: The hon. Gentleman need only look at the record to see the facts. One must, of course, take into account current market conditions, and I have to be satisfied that the projections given to me by the WDA for sales are realistic. I am so satisfied. I am able to speak for next year, and I have made the position for next year absolutely clear. We have projected figures for the year after that, and the following year. I ask the hon. Gentleman to look at our record and to recognise that my predecessor and I have brought the budget of the WDA to a record level in real terms.
The right hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) must not forget that there are differing views on this issue on the Opposition Benches. Many hon. Members would like to see the WDA become less of a landlord and to sell on the open market much of its factory space.

Mr. Rowlands: And individual tenants?

Mr. Hunt: Yes, of course that includes individual tenants.

Mr. Rowlands: rose——

Mr. Hunt: I am sure that the hon. Gentleman will have an opportunity to contribute to the debate, when he can expand on the point he wishes to make.

Mr. Rowlands: Will the right hon. Gentleman answer my question? The whole budget is predicated on the forecast of the sale of factory space. That will involve the sale this year of 74,000 sq m of factory space. To maintain the budget, that will have to rise to 300,000 sq m in the next two years. Whatever the rights or wrongs of that, may we have an assurance that any shortfall in the WDA budget will be made good by the Welsh Office?

Mr. Hunt: In putting together the budget, I must be satisfied that what are, after all, indicative figures are realistic and reasonable estimates. I am satisfied that they are realistic for next year, so the hon. Gentleman's point does not arise—[Interruption.] Although he does not think that they are realistic estimates, I have satisfied myself that they are. The figures have been given to me by the WDA.

Mr. Rhodri Morgan: The right hon. Gentleman must not mislead the House. He should be willing to admit that he tells the WDA what sort of target it must reach for reinvestment as a result of factory sales. We are referring to an idea that has come not from the agency, but from the Treasury and the Welsh Office.

Mr. Hunt: I put up with a lot from the hon. Gentleman, but the accusation that I am misleading the House is totally unacceptable. [HON. MEMBERS: "Withdraw."] I would not expect the hon. Gentleman to apologise——

Mr. Deputy Speaker (Mr. Harold Walker): Order. I should tell the hon. Member for Cardiff, West (Mr. Morgan) that Mr. Speaker has often reminded the House that to accuse an hon. Member or a Minister of misleading the House is unparliamentary and should not happen. Perhaps he will withdraw the remark or qualify it.

Mr. Morgan: I am terribly sorry if I have offended the Secretary of State by using an unparliamentary expression. I am sure that there was no intention on his part to mislead the House. [HON. MEMBERS: "Withdraw."] Mr. Deputy Speaker, you did not ask me to withdraw but to rephrase what I said, in such a way that it does not offend parliamentary canons.
The problem remains the same. The Secretary of State is saying that the Welsh Development Agency has given him a set of facts, when I know it to be the other way round—that he has told the WDA to raise a set amount of money from these sales.

Mr. Hunt: I do not know what to say to that. I think I will ignore the whole thing. [Interruption.]Perhaps hon. Members will get a chance to refer to that issue later, when I can intervene, but I am anxious to deal with some key points without taking up too much time, because many other hon. Members wish to take part in the debate.
Welsh Development International—the WDA's inward investment arm, of which we can be justifiably proud—has, among its recent successes, helped Wales to secure huge investments by companies such as Toyota, Bosch, British Airways, Sony and Dow Corning. Those five projects alone promise investment of nearly £680 million in the Principality.
There are now well over 300 overseas manufacturing companies in Wales, including 150 from Europe, 140 from


North America and over 40 from Japan. Last year, 142 projects were secured, and they are expected to generate £639 million worth of capital expenditure and create or safeguard nearly 16,000 jobs.
I reckon that to be a pretty marvellous achievement. Although some people say that I take the credit, on every possible occasion I make it clear where the credit belongs, and it belongs primarily to the work force of Wales. I am just one who uses the opportunity given to me, by the quality of the work force, to sell that asset of Wales, and I shall continue to do so. Indeed, without the Welsh work force, we would not have achieved those figures. We would not have those figures without the Welsh Development Agency, either. My predecessor set an excellent example in winning investment, and I hope that I am living up to his reputation. Indeed, I am proud to have some facts to announce.

Dr. Kim Howells: Will the Minister give way?

Mr. Hunt: I am coming to my peroration, but I shall give way.

Dr. Howells: I welcome those enormous achievements, and the WDA as well as the Welsh people can be proud of them. However, may I ask a simple question: how much did it cost to secure those projects?

Mr. Hunt: I shall let the hon. Gentleman have a detailed breakdown of the estimated cost of each project. I shall also place a copy in the Library. There are a number of component parts. For instance, we had tremendous co-operation in securing the investment with British Airways from the local authorities and from further and higher education colleges. That is extremely important. I shall try to assess the cost, but I believe that the projects have been extremely worth while, and a very good investment.
As I said, 142 projects were secured last year, which was an all-time record. The evidence of those achievements is to be seen throughout Wales, in the form of modern manufacturing and business premises. Every effort will continue to be made to attract internationally mobile projects and increase the quality of inward investment throughout Wales.
Against that all-time record of 142 projects, I was told just a few hours ago that already this year 165 projects have been secured, promising capital expenditure of £830 million and more than 15,500 new or safeguarded jobs. I pay tribute to all those concerned in helping us to secure that investment. That includes hon. Members on both sides of the House as well as the Welsh work force, the WDA, local authorities and all the other crucial members of our partnership, in particular—following recent announcements—the Development Board for Rural Wales.
I am also acutely aware that there is enormous development potential among Wales' indigenous companies. The agency's business services have a key role in supporting those companies and helping them to grow, where such support is not available from the private sector.
One of the most vital areas is in doing business in Europe. Wales is still essentially a small-firms economy:

over 90 per cent. of all manufacturing plants in Wales employ fewer than 100 people. That is both a strength and a vulnerability—a strength because it represents potential for growth, and a vulnerability because small firms often lack the management and financial resources necessary to do business overseas, or on a European basis, yet increasingly that is exactly what is required—to meet the competition and take advantage of the opportunities of the single market.
I have therefore given a high priority to developing business links with other European regions, particularly the "four motors"—the regions of Baden-Wurttemberg, Catalonia, Lombardy and Rhone-Alpes. The WDA has an important role to play in developing those links, particularly in helping to foster joint ventures and other business co-operation between smaller firms in Wales and Europe.
Last year, the agency also hosted the "Europartenariat", which is Europe's forum for small businesses. It attracted 1,300 people from 600 different companies from 17 European countries.

Mr. Gareth Wardell: I thank the Secretary of State and his inspector for the public inquiry that was held in my constituency near the empty site of the former Felindre tin plate works, which the WDA and British Steel have been trying to sell for some time. The decision prevents West Glamorgan county council from establishing a gipsy site adjacent to one of the most marketable sites in Britain. Even though I am sure that it is vital that those people are housed properly and appropriate sites are found for them, I am sure that the decision is correct and will enable the WDA and British Steel to market the site adjacent to the M4. Hopefully, the Welsh Office will be able to assist a new inward investor to use that site, which has been empty for so long——

Mr. Deputy Speaker: Order. Interventions should be brief.

Mr. Hunt: I do not wish to come between the hon. Gentleman and his Labour-controlled county council, but I thank him for his remarks. As he said, appropriate sites will have to be found.
We are determined to disseminate information as widely as possible. European information centres have now been opened in Mold and Cardiff to provide information on European Community legislation and policies, and on the legal requirements for tendering, grants, funding, training needs and so on. More than 100 companies a month use the service. It is most important for the future of Wales that we maintain that approach to Europe. As part of that, the WDA will open an office in Brussels in the near future.
On the agency's responsibilities for environmental matters, the Government have provided the WDA with the resources to commit some £220 million—at today's prices—to reclaiming derelict land in Wales. More than 9,500 acres of previously derelict land have been brought back into productive use in one of the largest and most sustained programmes of its kind in Europe.
As the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) will know, I was delighted to approve a scheme last year for work to begin on what I believe is western Europe's largest land reclamation scheme—the clearance of 900 acres of land at east Merthyr, which will provide new land for new industry, housing, and local


amenities. In the 1990s, business success will depend on the ability to recruit and retain skilled employees. Those employees will be attracted to an area with a first-class environment for business, leisure and family life. That is our objective for Wales.
The WDA can be proud of the role that it has played to date in the remarkable transformation of the Welsh economy and industrial landscape. I pay tribute to the staff of the agency, past and present, for all their efforts, to the work of past and present chairmen and chief executives of the agency, and to my own predecessors as Secretary of State. However, many challenges still face us and it would be wrong to suppose that the task is complete, or that we can yet relax our efforts. We must therefore look to the future.
To meet the challenges, I am delighted to have the support, knowledge and expertise of the present board of the WDA and of its chairman. The chairman and the present team are continuing the record of outstanding achievement. To add a new dimension and considerable experience of the world of international business and commerce, I am delighted to take this opportunity to announce today a new appointment to the board, Dr. Pamela Kirby. Dr. Kirby will be the first woman board member of the Welsh Development Agency—[HON. MEMBERS: "Hear, hear."]. She has strong family connections with west Wales and is the managing director of one of the fastest growing pharmaceutical companies in the United Kingdom, Astra Pharmaceuticals. Her experience and knowledge of the world of international business and commerce will enable her to make an important contribution to the work of the WDA. I greatly welcome the way in which that appointment has been received by the House.
For the immediate future, hon. Members will be aware that I will next year be providing more money for the WDA. The agency's gross budget is to be increased by £13·5 million to more than £166 million, the highest ever in cash and real terms. The funding will allow the WDA to build on its success in attracting inward investment to Wales. The agency will now be able to continue with a major programme of factory building in those areas of Wales where private sector provision is presently inadequate. Increasingly, the agency will concentrate on the preparation of sites and infrastructure, and on encouraging private sector investment in Wales, particularly through joint ventures.
Under the "Welsh property venture", more than half a million square feet of business accommodation has been secured in the first year of operation. For every £1 that the agency invested, more than £4 of private sector investment was secured for Wales.
As the agency increases its focus on the revitalisation of rural and urban communities, I also intend that it should make an even greater contribution to environmental improvement and urban renewal. In urban districts, under the programme "urban development in Wales", the WDA is working closely with local authorities and the private sector. Such schemes are under way in Llanelli, Ebbw Vale, Holyhead, the Cynon valley, Rhyl and Milford Haven. Those schemes are helping to create the right environment for living and working.
The WDA will also continue to concentrate on its rural districts, which have particular problems. The agency's rural property programme is designed to improve the

viability and vitality of rural areas and has already highlighted 15 key rural towns and communities for action.
Like every non-departmental public organisation, the WDA is subject to a financial management and policy review at least every five years, in accordance with Government guidelines. That is a thorough, root-and-branch review to test the need for its continuing role and the effectiveness of its operations. That review is currently in hand for the WDA, and I look forward to the study with great interest. It will inform and shape future programmes.
I greatly welcome the way in which a more positive partnership is evolving as those programmes develop. That relationship is often led by the WDA, and includes local authorities. I shall do everything I can to encourage that partnership approach, because I believe that it gives Wales a significant edge.
We must build on those successes. The agency can and will play a role as an instrument of the Government's industrial and economic policy in Wales, and do so with distinction. I urge the House to support the Bill so that the agency can continue its fine work and achieve the objectives that the Government have set.

Mr. Barry Jones: The Secretary of State largely overlooked the recent job losses due to, for example, the closure of the Brymbo steelworks in Clwyd. There were also job losses at Austin Taylor in Gwynedd, Inmos in Gwent and AB Electronics in mid Glamorgan and the closure of Penallta colliery. It will put the debate in context if I say that unemployment in mid Glamorgan puts the county in the top 10 of the worst places in Great Britain, with nearly 25,000 people on the dole. There are more than 13,500 unemployed people in Clwyd county and more than 10,000 in the county of Gwynedd. In south Glamorgan, nearly 19,000 people are out of work.
Why has the Secretary of State no strategy and no plans to safeguard what remains of Wales's manufacturing base? Why has he been so laggardly in responding to the loss of apprenticeships? Why has he neglected the transport infrastructure? Why has he overlooked the decline of the construction industry? Where are the jobs to take the place of the thousands of coal jobs that have been lost? Where are the well-paid permanent jobs for those who have been displaced from the steel industry?

Dr. John Marek: I apologise to my hon. Friend for butting in on him, but the position is even worse. He mentioned Brymbo. When jobs were lost there, Brymbo was making a profit, and had done so for the last 20 years of its existence until it was closed last year. Since then, the Welsh Office has not been able to do anything about it. The land is lying idle, the people who lost their jobs have not been able to obtain new ones, and it is a sorry mess. I hope that the increase in the borrowing limit will enable the WDA to do something for my constituents.

Mr. Jones: My hon. Friend has fought hard on the Brymbo issue, and was right to say that it is a sorry mess. It was a shabby episode; the locality was treated badly and its residents have yet to receive justice. I will support my hon. Friend in his efforts on behalf of the people of Brymbo.
I thought that the Secretary of State was a shade complacent. On 26 June 1975, on the Second Reading of


the original legislation, the Welsh Development Agency Bill, the hon. Members for Cardiff, Central (Mr. Grist) and for Clwyd, North-West (Sir A. Meyer) voted against it, as did the Minister of State at the Welsh Office and Nicholas Edwards. The record shows that the Minister of State was in a fierce mood that day. He thundered: "This is socialism". The evidence shows that, even then, the bardic steamroller was inching forward through debates.

The Minister of State, Welsh Office (Sir Wyn Roberts): With regard to what I said in 1975 about the original legislation to establish the Welsh Development Agency, is the hon. Gentleman not aware that the first action that the Government took when they came into office was to change the role of the WDA, which is now a very different agency from the one that it was? That accounts for its current great success.

Mr. Jones: I read every word of the right hon. Gentleman's speech and it was rabid. If he were to re-read it, he would blush to his roots.

Sir Anthony Meyer: I am grateful to the hon. Gentleman for his typical courtesy. While he is on the subject of consistency, will he say where he stood on the issue of Britain's membership of the European Community during those years?

Mr. Jones: The hon. Gentleman is greatly respected and has contributed greatly to our debates over many years, and I shall be sorry to see him standing down at the general election. However, I think that his intervention might be just a little wide of the wide subject under discussion. It is his King Charles's head, and he shall have it; nobody can take it away from him.
I was about to say before I was so charmingly intervened upon—as only an old Etonian can—that today's debate can take place only because the last Labour Government created the Welsh Development Agency. It should be put on record that the Administration of Mr. Harold Wilson enacted the legislation that created the agency. It was far-sighted, practical, caring legislation. Mr. Wilson's objective, and that of his then Secretary of State for Wales, my right hon. and learned Friend the Member for Aberavon (Mr. Morris), was to give Wales a fresh start.
As Premier in a previous Administration, Mr. Wilson created the Department of State which is the Welsh Office. Mr. Wilson appointed the first Secretary of State for Wales, the great Mr. Jim Griffiths, the former Member for Llanelli. Mr. Wilson's Labour Government for the first time endowed the Welsh Office with the real economic and industrial power that it needed. That power was to be used for the people of Wales, and to make good its scarred and poisoned landscapes.
I shall mention the novels that relate to Wales: The Rape of the Fair Country, How Green Was My Valley and the play, "The Corn is Green". Those titles are famous, evocative and emotional. They may be inspiring as fictional chronicles of our unfolding social and economic history, but those who, in yesteryear, amassed fortunes from coal, iron, steel and slate rarely ploughed back the profits that sweat and blood had created. That is why we needed a Welsh Development Agency, and I stress that it was a Labour Government who gave it to Wales.
The Bill restores the financial limit to the real value that it achieved after the last increase in 1988. When we had the previous debate on the Bill in January 1988, the economic situation was different. Unemployment was falling, the WDA factory vacancies were low and business optimism was high. But today the Welsh economy is in the depths of the second Conservative recession in 12 years. Unemployment is more than 40 per cent. higher than it was 12 months ago, output is down by 5·4 per cent. and bankruptcies are up 88 per cent. on last year with 1,317 bankruptcies and insolvencies in Wales in the first nine months of this year alone. That is a serious situation. The number of vacant agency factory units is up. Today in south and north Wales business men who have given a lifetime's service to job creation are now being ruined. Their businesses are going to the wall; they are being destroyed by the Government's policies.
I think that the Secretary of State will agree that the WDA has proved an outstanding success. I agree with the right hon. Gentleman that it has provided a platform for economic regeneration in Wales in partnership with our local authorities. I will celebrate with the right hon. Gentleman the location of Sharp and Toyota in my constituency, Bosch in south Glamorgan and the considerable extension of Sony in Bridgend, which I visited with my hon. Friend the Member for Bridgend (Mr. Griffiths). We went there first a matter of days before the Prime Minister and were given a fine reception in a fine industrial location.
New challenges are opening up for Wales. The single market after 1992 will make product market competition stiffer, particularly for peripheral regions of Europe such as Wales where many firms are ill equipped to meet the challenge ahead. The new product markets are increasingly competitive and—I emphasise—quality conscious. There is growing competition for inward investment from other parts of the United Kingdom, and particularly from eastern Europe. There is also a vital need for direction from the Welsh Office and a new partnership approach between Government and industry.
The Secretary of State mentioned inward investment. In the inward investment battles of the 1990s, Wales will not be able to compete with eastern Europe on labour costs. With or without the efforts of the right hon. Member for Worcester (Mr. Walker), eastern Europe will provide a range of inward investment opportunities that may be lost to Wales. Nor should we wish to compete in the new Europe on the basis of paying poverty wages to attract low skill and low technology employment. That is not the route to a stable and dynamic Welsh economy. Manufacturing processes and the competitive markets of Europe require total quality, flexibility and innovation. Such skills do not come from poverty pay; they require the efficient use of labour and, above all, quality training.
As British Airways proved, adequate skilled labour and training is a chief concern of the new generation of inward investors. On that we can agree. It is imperative that Welsh Development International communicates the skill requirements of likely inward investors to our training and enterprise councils and our colleges. That is clearly done by British Airways, but it must be common practice in the 1990s.
I am concerned that the proposals in the Further and Higher Education Bill may well reduce the ability to co-ordinate such responses to the needs of inward investors. I have had consultations with some local


education authorities and some leading councillors in south Wales and that is what they tell me. The Welsh Office and the agency must take that on board.
The effect of the recession on our manufacturing industry has been pointed out in a recent report by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). I understand from him that the Hoover apprenticeship scheme trained some 24 apprentices a year in its heyday. This year, for the first time in 48 years, Hoover will not recruit one apprentice. In Clwyd in my constituency, British Aerospace at Broughton has virtually halted its apprentice scheme this autumn. This year it has taken on only 12 clerical apprentices; it usually takes on 70 or more trainee tradesmen, but that is not the case this autumn. British Aerospace in Clwyd, with more than 4,500 employees, is, arguably, the largest reservoir of skills in northern Britain, certainly in Wales, but we have there the virtual rundown of a necessary resource for Wales, which must make its way in the next century and prepare now for the competition to come.
The National Audit Office report raises a number of crucial questions not only about the agency but about the Welsh Office and regional selective assistance. Successive Conservative Welsh Office Ministers have placed great emphasis on estimates of future jobs for political as well as other reasons. Wales has done extraordinarily well in creating new jobs. But now we need to discover why there has been such a shortfall in jobs created compared with the projections. I hope that when the Minister replies he will attempt to answer that question. It must be addressed. What does the Secretary of State intend to do with regard to the National Audit Office's key recommendation that the WDA's monitoring techniques should be improved so that its programmes can be properly evaluated?
Reference has been made to innovation and technology. That is the seed corn for the high added value and high skill employment that Wales must foster in the 1990s. The WDA needs more support from the Welsh Office to increase the Welsh take-up of the United Kingdom and the Common Market funds for research, development, innovation and technology transfer. It is fair to say that so far Wales has fared poorly in attracting such funds. My hon. Friend the Member for Cardiff, West (Mr. Morgan) has made some observations on that matter.
We must also expand ventures such as the Imperial science park. That joint venture between Imperial college, London, the agency and Newport borough council must be applauded. It is a first-rate development which is good for Wales. It will become one of the leading research and development parks in the United Kingdom.
I have set out the Labour party's agenda for the agency and I have referred to the Welsh economy, but before I conclude I pose the question: what would a fourth Conservative term mean for Wales? [HON. MEMBERS: "Another recession."] My right hon. and hon. Friends are right. It would mean a third recession for the Welsh economy. The Conservatives have failed to address the key supply side issues, failed to deliver internationally competitive standards of education and training, and starved business of investment through high interest rates.
Another Conservative Administration would mean creeping privatisation for the Welsh Development Agency. If the Conservatives were to win again—I do not think that they will—the WDA could be broken up, on the lines of Scottish Enterprise. Alternatively, the agency's property revenue function, which represents a major source of its

revenue, might be hived off. The House may remember that when a similar proposal was made by the agency's west Wales office, it led to the resignation of senior officials at that office.
The Conservatives' record is a bad record. When the general election takes place, Labour will be victorious. A Labour Government will create a successful, productive, and modern economy. Only a Labour victory will endow Wales with an economy capable of meeting the fierce competition of the next century.

Mr. Denzil Davies: My hon. Friend the Member for Alyn and Deeside (Mr. Jones) rightly chastised the Government for their economic record. It is sad that, after 10 years of Conservative rule, Wales is the poorest economic region in Britain. That was not the case in 1979. Whatever Conservative Administrations have tried, they have been unable to improve relatively the wealth of the Welsh economy.
We welcome the Bill, because it is quite an achievement for the Welsh Development Agency to have survived the free market mania that held sway between 1979 and 1991 and the ideological zeal of the right hon. Member for Conwy (Sir W. Roberts), who vehemently opposed the WDA originally. That is a tribute also to my right hon. and learned Friend the Member for Aberavon (Mr. Morris), who helped to build that durable institution, as well as the Land Authority for Wales. Both survived the Thatcherite blitz of the 1980s.
The Secretary of state that the aim was to achieve a self-sustaining private sector. I hope not, because I cannot identify any in the modern industrial world. France does not have a self-sustaining private sector economy, and nor does Germany or Japan. the agency's purpose is to fill the gaps that the private sector cannot fill. That is why we need interventionism, and why it is good that the WDA has survived.
The agency will have to take a different tack in the 1990s in addressing itself and the Welsh Office to the problems that Wales and the Welsh economy will face in the 1990s—which will be different from those of the 1980s.
Two factors have affected, and will continue to affect, the Welsh economy. My hon. Friend the Member for Alyn and Deeside alluded to the collapse of the Soviet empire. We must acknowledge that the centre of gravity in Europe is moving further east. We have always been to the west of the centre of power—certainly so far as Brussels is concerned—but that will move further east. It is all very well for members of Plaid Cymru especially to salivate every time Baden-Wurttemberg is mentioned, but it could become a big element. Investment from that source may well go to east Germany, Czechoslovakia, and parts of the former Soviet bloc.
It is fashionable to condemn the old command economies of eastern Europe—but when the dust has settled, it may be realised that considerable basic engineering skills are available in east Germany and Czechoslovakia. I would like comparisions made of the number of qualified engineers in Czechoslovakia and Wales. I hope that Wales will come out of them quite well, but I have doubts.
Those skills can be found also in other parts of eastern Europe. We must not get carried away with the idea that the Soviet economy was unable to produce people trained


in production. They will be employed in future, and some investment will go to those eastern states unless we are careful. The right hon. Member for Worcester (Mr. Walker) has already spotted that; having already made a foray into Baden-Wurttemberg, he is now to work for Baden-Wurttemberg in trying to move investment away from this island to eastern Europe.
This is not the occasion to debate the move towards European union, but if that is to occur, there is a great danger that Wales will become the South Dakota of the new union. If the United Kingdom is locked into currencies that it cannot change, and unable to control interest rates and to operate budget deficits, and if it cannot subsidise its industry, this country and others on the periphery—we will be more so in future—will suffer from the concentration in the centre.

Mr. Keith Raffan: Does the right hon. Gentleman agree that, if Britain does not sign up to European monetary union and is outside the inner currency circle, there will be pressure on many of the overseas companies that have located in Wales to relocate elsewhere in Europe—and that Wales would then lose many of the benefits achieved by the WDA over the past 10 years?

Mr. Davies: I did not intend to provoke the hon. Gentleman, but without massive transfers of resources from the centre to areas such as Wales, we will suffer from the move towards European union. I see no sign of them by way of an enhanced regional policy in Brussels. If there are such transfers, my fear is that they will go to southern European countries, which can make a case for them in terms of income per head, unemployment, and their domestic economies. Portugal, Spain, southern Italy and Greece could get money—but where would that leave Britain?
I doubt that the Germans would be prepared to use their public money to provide such transfers, which we must have if Wales is not to become the South Dakota or Oklahoma of the united states of Europe, the federal union, or whatever it is to be called.
We are all agreed that the WDA's inward investment arm has worked well, and that operation must be continued and nurtured. I am concerned, however—this is not meant as a criticism of the people who run the agency—that the agency is leaning too far towards property interests. It is natural for the WDA to have an involvement in property, because to some extent it grew out of the land reclamation units of the Welsh Office. It is natural also that the WDA should be concerned, as it is, with clearing derelict land and constructing new buildings on it.
My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) gave the public expenditure figures. The Government's hope is that, by selling off property and generating property income, they can be relieved of putting grant-in-aid money into the WDA. However, the 1980s are over, and the 1990s will not be about property debt, and using property development to increase land values. Ski slopes, marinas, and golf clubs are all very nice—but they will not attract the kind of investment needed in the 1990s.
To do that, Wales must create new skills. Whatever may be the value of the pound or ecu, if Wales cannot offer the necessary engineering skills, it will not attract inward investment. Wales is falling down on skills. It does not have the engineering, technological and scientific skills that it should to attract investment. Ministers know that very well.
Our education system is no longer geared to produce the engineering, technological and scientific elite that we need. It is geared to produce the semi-skilled and, indeed, unskilled work force who are required in many large sectors of the economy, especially the service sector. Most jobs in the service sector are unskilled, and a specialised education system is not needed to produce them.
We cannot produce the elite engineering skills possessed by Japan, Germany and, to an extent, France. To produce such skills, we need a system that is still concerned with diligence, discipline and attention to detail. The Japanese have done so well not because of management skills but because their engineers are so good. Engineering demands diligence, scientific skills and attention to detail.
I pay tribute to the West Wales training and enterprise council, which appreciates the need to create manufacturing skills. It is, however, having to do its work against a background of 10 years in which nothing was done, and despite the collapse of much of our industry. If an area contains only service industries, where can people be trained to become engineers and technologists? They can only hope to be employed by McDonalds, B and Q or Great Mills. The TECs do what they can, but they have not the hinterland or the infrastructure that would enable them to carry out their job properly.
Perhaps the WDA should now consider itself the arm of the Welsh economy that tries to produce and use money to create an elite in science, technology and engineering, and thus benefit the Welsh economy. I do not know whether that can be done, however. At one time, the California and Massachusetts institutes of technology were the great institutions or the world, but, for all I know, the great institutions of production and engineering may now be in Japan. Why cannot the WDA involve itself more with schools in Wales? Why cannot it find the youngsters of both sexes who have an aptitude for engineering and science, and use Government money to encourage them—perhaps even send them to Japan to be trained? We cannot train them here.
We need an interventionist agency. We may criticise the French ecoles for being elitist and superior, but they have been remarkably successful in creating a technical and scientific work force, quite apart from administrators and civil servants. It will take time, but perhaps the WDA will be able to create the skills without which we cannot develop the Welsh economy, regardless of our political views.
Those are the challenges for the 1990s, rather than building or property ventures or even the clearing of land. If we have no skilled work force, the investment will not come, whatever currency union we may belong to.

Mr. Gwilym Jones: As my right hon. Friend the Secretary of State pointed out, this debate follows a month in which the unemployment figures fell in Wales. That is no small achievement, and it deserves to be


noted: both the headline rate and the seasonally adjusted figures fell. I wish that I could say that the hon. Member for Alyn and Deeside (Mr. Jones) had acknowledged the fall, but, as always, he tried to paint a completely different picture. The hon. Gentleman is a perpetual merchant of doom and gloom: if he had the chance he would always talk down the Welsh economy, rather than acknowledging positive developments.
In the 1983 Parliament, the hon. Gentleman could be relied on to table the same question about unemployment for every Welsh Question Time. That tailed off remarkably in the three years of the current Parliament, in which unemployment fell month after month. The hon. Gentleman became rudderless then, and he may be in danger of becoming so again; we all hope, in our heart of hearts, that unemployment will fall and he will have nothing left to ask questions about.

Dr. Kim Howells: I know that the hon. Gentleman is not habitually flippant about such matters; I know that he cares about them. Will he acknowledge, however, that Wales contains some employment black spots? They can be found in the north-west, the middle and, indeed, the south. It is a travesty to treat the subject with anything other than the seriousness that it deserves.

Mr. Jones: I hasten to reassure the hon. Gentleman that I have no wish to treat the subject with flippancy. I know that in the parts of south Wales that he and I represent, and in other parts of Wales, it is not always easy to attract potential investors. I suggest, however, that the Government and the WDA would be even more successful in helping Wales if Opposition Members concentrated on the positive aspects of what is being done, rather than adopting the attitude of doom and gloom that they so often display.
I welcome the opportunity to review the WDA's work. It has already been pointed out that, when the agency was set up in 1975, its establishment was opposed by my party. The hon. Member for Alyn and Deeside's party was then in government. The WDA was a rather different animal then—a very imprecise and wishy-washy animal. It was responsible for industrial development, promotion and publicity, the provision of industrial sites and premises, industrial infrastructure and environmental improvement. That is quite a wishy-washy list.
As my right hon. Friend the Minister reminded us, virtually the first action that was taken after the 1979 election was the reshaping of the agency into a meaningful body—one that has been successful in Wales. It now has much more precise and targeted objectives: the provision, letting and management of sites and premises for industry, land reclamation and the promotion of Wales as a location for industrial development
Is it not amazing that the promotion of Wales as a location for industrial development was originaly tucked away alongside publicity? It was originaly a very underrated feature. That alone may justify my party's opposition in 1975, and our subsequent reshaping of the agency.
Do not Opposition Members remember the fiasco of the advance factories? The right hon. and learned Member for Aberavon (Mr. Morris)—and probably the hon. Member for Alyn and Deeside—would scuttle around Wales, opening one advance factory after another. It

became a joke among the people of Wales: yet another empty shed would have its ribbon cut by the right hon. and learned Gentleman. That was the standard of the WDA before my right hon. Friend reshaped it into the successful animal that it is now.
The present Government have made the agency much more specific and appropriate. It should never be forgotten that only the present Government have provided it with sufficient funding. As my right hon. Friend was able to announce, its budget has been doubled in real terms, to £160 million. The WDA is now a success of which we can all be proud, as hon. Members on both sides of the House have acknowledged. The right hon. Member for Llanelli (Mr. Davies) stressed its success in attracting inward investment. Since the inward investment arm was formed in 1983, approximately 85,000 jobs have been created or secured. We should all praise the agency highly for that.
I recall attending in the summer recess the most pleasing opening of the Robert Bosch factory outside Cardiff. I should give credit to my right hon. Friend the Minister of State because he has devoted much energy to developing links with the motor areas of Baden-Württemberg, where Robert Bosch came from, and with Catalonia. He has signed a remarkable treaty in Catalan and Welsh, and we look forward to further developments between Wales and Catalonia.
My right hon. Friend the Secretary of State announced that this year the WDA has achieved another record in attracting 165 projects worth £830 million and 15,000 jobs. Again, that is a most creditable figure. I emphasise what my right hon. Friend said—that attracting inward investment is a team job involving Ministers, the Welsh Development Agency, county and district councils and, in my part of south Wales, Cardiff and Vale enterprise. In addition—sometimes it does not get thanked enough—Cardiff chamber of commerce and industry plays a major part in supporting missions abroad and looking after potential investors who come to Wales.
Inward investment has been a real success in Wales. The policy of the Trades Union Congress to Japanese investment is particularly regrettable. It described it as an alien culture.

Mr. Alun Michael: The hon. Gentleman paid tribute of the work of the Cardiff chamber of commerce and industry, which received considerable grant moneys from local authorities for the work that it undertook with other bodies. Will he be a little more even-handed rather than appearing to be churlish in criticising organisations and ignoring the contribution of local authorities?

Mr. Jones: That shows that the hon. Gentleman was not listening. If he had paid closer attention, he would have heard me refer to the team that usually comprised the Welsh Office, the WDA and local councils. I also mentioned the significant contribution of the Cardiff chamber of commerce and industry. I do not depart from what I said.
I was dealing with the worrying stance of the TUC in condemning Japanese investment as an alien culture. Especially worrying—I did not notice any comment from the hon. Member for Alyn and Deeside, but perhaps the hon. Member for Cardiff, South and Penarth (Mr. Michael) will deal with this—is Labour Members failing to condemn the TUC's attitude to Japanese inward


investment. Wales has been most successful in attracting Japanese investment and is therefore most vulnerable to a Labour-TUC campaign against such investment. That would only encourage existing investment to relocate elsewhere and potential investment to say that Japanese investment is not welcome in Wales.

Dr. Dafydd Elis Thomas: I have no authority to speak on behalf of Wales TUC, but from my knowledge of its activities I can say that that is not its policy. It has worked hard to ensure suitable trades union agreements to facilitate Japanese investment in Wales.

Mr. Jones: I look forward to the Wales TUC distancing itself from the TUC, otherwise it will feel that it is being betrayed by the TUC's hostile approach. Japanese companies in Wales and those who care about the Welsh economy must be curious about why Opposition Members have not condemned the TUC's policy.

Mr. Michael: We should all agree on the need to encourage inward investment and indigenous industry and adopt a bipartisan approach. Labour Members agree with the hon. Member for Meirionnyd Nant Conwy (Dr. Thomas) that Wales TUC has adopted such an approach. There has been a partnership between the different agencies of national and local government. In view of the importance of the debate and of the WDA, I invite the hon. Gentleman to be less churlish and not turn it into a party-political ping-pong match. It is too important for that.

Mr. Jones: The hon. Gentleman always dodges the issue. Perhaps I should give way again so that he can condemn the TUC's policy of hostility to Japanese companies and for describing them as an alien culture. We know that that is the TUC's position. Common sense tells us that the only likely result is that Japanese investment will be frightened away and not made welcome. Shall I give way to the hon. Gentleman so that he can condemn the TUC?

Mr. Michael: The hon. Gentleman might as well give way so that we can get a little common sense into the debate. We are discussing the WDA. If he knows anything about the work to secure inward investment in Wales, including Japanese investment, he should know of the close partnership, to which tribute has been paid by successive Secretaries of State, between Wales TUC and unions. It is a diversion for the hon. Gentleman to go down this course. Although it is not for me to call him to order, I suggest that he returns to the subject of the Welsh Development Agency.

Mr. Jones: I suppose that I should apologise. I have been wasting the time of the House by allowing the hon. Gentleman to intervene. He continues to evade the point. He will not condemn the TUC. He is saying, as a Labour Front-Bench spokesman, that he does not care about Japanese inward investment. By not condemning the hostility to Japanese investment, on behalf of his party he is saying that he does not want Wales to have the opportunity of exporting to Japan. Instead, he would prefer investment to be made elsewhere and for Japan to export to Wales.
Wales can develop far more profitable opportunities from its successful partnership with Japan. About three years ago, a parliamentary mission to Japan met the head of Yuasa Batteries. His opening remarks were, "How can we apply the Thatcher miracle here in Japan?" the Japanese recognise that they can gain from us in the same way as we can gain from them. But we shall not gain from the hostility of the TUC or from Labour's failure to condemn that attitude.
Another inappropriate development has been the unfortunate way in which the chairman of the WDA has been drawn into political debate. Early-day motions have been tabled by an hon. Gentleman who is not in his place to explain what he means which make some unwarranted or not obviously justified allegations against the chairman. The most substantiated charge against him is that, in the middle of a busy business trip to the other side of the world, he might have had a 24-hour stop-over en route from Australia to the west coast of America. That is a most ridiculous charge. It is like criticising the hon. Member for Cardiff, West (Mr. Morgan) for stopping for a cup of coffee at Membury or Leedelamere services as he drives home to Cardiff on the M4 tonight. That the chairman should have a break and stop at a normal refuelling point for 24 hours—all air services from Australia stop at one or two locations—scarcely appears to warrant a wholly unjustified early-day motion. Again, I wait to see what Opposition Front-Bench Members say about that slur. Anyone who has been on parliamentary missions abroad will know that they are not junkets. Their itineraries—or those of the missions on which I have been—have been exhaustive. There was very little free time left to any of the participants. The people who work so hard for Wales inevitably need a break at the weekend to recharge their batteries so that the hard work done until Saturday morning can be restarted on Monday morning.
I am sorry that the hon. Member for Cardiff, West (Mr. Morgan) is not here. I regard the early-day motion as the cheapest of cheap shots. I imagine that he does not have great support from his colleagues. In considering the signatories of the two early-day motions, one finds that of the first six only one signature on each motion is that of a Welsh Member of Parliament. The hon. Gentleman has had to rely for support on English Members of Parliament, and we can see those who signed this wholly unwarranted and unjustified slur against the chairman of the Welsh Development Agency and against the agency itself. I wish that the hon. Gentleman were here to hear what I say. He is doing nothing other than contributing to the "selling Wales short" campaign.
I have met the chairman of the WDA a few times and I know of no justification for such an attack. He appears to have very much the right approach, which is to go out and get business for Wales. Who can be surprised that changes are being made to such an agency? It is a body which must constantly move on, change and become more efficient and more expert. It is natural that a new chairman of the WDA would change the style of the agency's operations. From what I can see, he seems to be making the right changes and the WDA is making progress.
I hope that the useless and ridiculous early-day motions, which should never have appeared on the Order Paper, can be put behind us and that we can pretend that they do not exist. In general, the WDA and all those who work for it are doing a good job, and we want to see them do even better.

Mr. Richard Livsey: I welcome the Bill to increase the investment limit of the Welsh Development Agency from £700 million to £950 million. The WDA's record is very good and I do not think that any hon. Member will dispute that.
I do not wish to be churlish, but I am a little concerned about the comparison between the ability of the WDA to spend £950 million and the £16 million approximately that is allocated to the Development Board for Rural Wales. Since the WDA also has a remit to operate in rural areas, it is clear that some of the money allocated to it will find its way into the rural areas of north, south and west Wales. However, there has been a lack of recognition so far in the debate of the crisis in the countryside, in farming and in the rural areas. I am greatly concerned that many sons—even single sons—of farming families are now leaving the industry. That has happened to the chairman of the Brecon and Radnor National Farmers Union, who was a member of the same young farmers club as I was. His son is unable to continue on the family farm, which is sad.
I think that we all accept that there must be an interventionist role in the WDA and the DBRW for channelling public funds into a mixed economy, so more attention should be paid to the very low incomes now to be found in farming. They are now at their lowest since the second world war.
One problem confronting agriculture and agricultural products is the power of the supermarket chains in the marketplace. They now control more than 50 per cent. of food retail marketing. Indeed, one would have thought that it should not be necessary for them to ask to open on Sundays in order to ply their trade. I should have thought that they were doing very nicely anyway. However, that leaves the agricultural industry, and farmers in particular, in a very weak bargaining position. I should have thought that the WDA and the DBRW could in future pay more attention to aspects of co-operating marketing. Earlier this week I visited the Royal Welsh showground and I was pleased to hear the Chairman of the DBRW, Mr. Glyn Davies, announce investment in a new food hall on the Royal Welsh agricultural show site. This is an excellent initiative and should be the forerunner of more initiatives to market more Welsh food products.

Sir Wyn Roberts: The hon. Gentleman is well aware of the financial backing that the Development Board for Rural Wales is giving to food promotion which will be our main arm in selling Welsh food products at home and abroad.

Mr. Livsey: I am certainly aware of that fact and I welcome such initiatives which, I think, are long overdue. I am glad to see that some are in the pipeline. I am concerned about the present inability of farmers to co-operate effectively in marketing their food products. I hope that such initiatives will assist that process.
I am especially concerned about the lack of EC abattoirs in rural Wales, whether in the WDA's area or in that of the DBRW. I think that I am right in saying that there is now a fourth abattoir in Llanidloes which—I acknowledge—has received support from the DBRW. However, let us compare our position in rural Wales with that of other parts of the United Kingdom. Scotland has 20 European Community-approved abattoirs and Northern Ireland has 28, so we are a long way behind. I

should like the DBRW and the WDA to encourage co-operative marketing groups among farmers and to enable them to set up abattoirs and meat packing plants so that they can compete in the fierce retail food market in Britain and, I hope, to export to mainland Europe where they also need to compete.
Unless we have our house in order and can market products that housewives want and which are in an easily accessible form for modern living, we shall lose out. It appears that unless things change rapidly, we shall be able to slaughter only about 40 per cent. of our lamb crop in Wales. We still have little ability to produce marketable products from meat packing, and so on.
I make no apology for drawing the Minister's attention to an issue that concerns my constituency. I noted the WDA's great success in land reclamation in south and north Wales. It has done an excellent job. However, as the Minister will know, I am very concerned about a continuing burning tyre fire on a derelict site. The fire has serious environmental consequences at Heyope near Knighton, where 10 million tyres have been on fire for the past two years as a result of arson. Water is becoming steadily more polluted in the river Teme. Four million water consumers downstream in the west midlands might be threatened. To be fair, many agencies have tried to tackle the problem, including the Powys fire service, which has gone as far afield as Canada to draw attention to the problem. As many millions of pounds are available to the WDA to reclaim old sites in south and north Wales, will the Minister please consider the possibility of using derelict land reclamation funds from the WDA to tackle that site, which is not large? We are talking about hundreds of thousands of pounds, not millions of pounds, to overcome the problem. There I leave that topic.

Sir Wyn Roberts: I know that that problem is causing concern and I am glad to tell the hon. Gentleman that there will be an early meeting of the chairman of the WDA, the local authority and company representatives to discuss it further.

Mr. Livsey: I am delighted to hear that and I thank the Minister most sincerely. There is great and mounting concern about the situation, which not only affects a small locality but has wider implications. I believe that the situation is unique in the world.
Another aspect of the WDA and, to some extent, the DBRW which concerns me—I am not nit-picking; I am merely mentioning the matter—is the desirability of having more in-house consultants and agencies in Wales to provide consultancy work for the two agencies. Far too often consultancy services have to come from outside Wales, yet in Wales we have people with professional training who could develop greater expertise in consultancy work, especially financial consultancy. I trust that in future this idea will come more to the fore.
Only yesterday, as the Minister will know, we had a wide-ranging discussion on infrastructure projects in Wales—especially roads. Wales still has poor infrastructure. We still need a north-south road and better links between mid-Wales and the midlands. That will require more public investment than can be provided by local authorities, or even by the Welsh Office. Some of the agencies may be able to assist us. Perhaps the WDA and the DBRW could make recommendations for improved


infrastructure in Wales. That would assist with exports and communications and improve economic activity in general.
I am sure that the Welsh Office already consults on the matter, but perhaps it could consult the agencies more on economic infrastructure, such as roads and railways. Perhaps it could consider jointly with the Department of Transport the desirability of electrifying the railway lines into Wales.
Other hon. Members have rightly stressed the importance of skill training. It is vital. We know that Wales has an immensely dedicated resource in its work force. Hon. Members have also rightly praised the Welsh work force for its ability to get down to the job, tackle it and learn how to increase productivity. However, even given the advance of the training and enterprise councils, we need more integrated skill training and more integration with local education authorities, too. That matter needs more attention. Sandwich courses are important, as is training on the job and then returning to courses run by education authorities—higher education colleges, for example. I was in that environment before I entered the House.
Perhaps with the increased investment available under the Bill the WDA will be able to assist with the problem of unemployment. Wales is still an unemployment black spot, with more than 120,000 people out of work. That is far too many. The problem must be tackled.
The philosophy of the mixed economy is now widely accepted on both sides of the House, despite what the hon. Member for Cardiff, North (Mr. Jones) said, Thatcherism is dead. It may have been a factor in the 1980's, but it does not live in the 1990's. We are in a different era altogether. We all accept the mixed economy and the fact that the WDA and DBRW can contribute to it.
We have been fortunate in some of the tenants of the Welsh Office, especially the right hon. Member for Worcester (Mr. Walker)—I suspect that the tendencies of the present Secretary of State, too, are on the damp side. We have been fortunate that there has been the will to pursue the philosophy of running the mixed economy better. The fact that the Bill provides increased powers for giving financial support to the WDA shows that clearly, too.
The problem of the low-wage economy in Wales still needs to be tackled. We will not get better quality jobs until we have better skill training and more skilled people there. That cannot be emphasised too much—nor can the importance to the Welsh economy of home-based industry and small businesses that grow. More attention must be paid to them, especially in terms of providing better financial arrangements and management assistance. I know that the chief executive of the WDA is now considering that and will soon go round the small businesses of Wales, geeing them up and trying to improve the position. I welcome that initiative.
Increasing the amount of manufacturing industry, after its disastrous decline over the past 12 years, is vital for Wales. The WDA will have a crucial role there too.
The future of Wales lies within the European Community. I strongly endorse monetary union and greater policial integration in the EC. I believe that we will get more for the Welsh economy, a higher standard of

living and a better future for our young people out of better integration within the European Community. Federalism is much misunderstood in some parts of the Conservative party. Subsidiarity—the policy coming out of the EC—fits Wales well. It is about making decisions at appropriate levels in the Community, so one would hope that in future more power will reside at a Welsh level. Parts of the WDA operation already show that. All that we need to do now is to bring greater democracy to Wales to ensure that political decision making, too, is brought nearer to the people.
At a European level, the creation of a single currency is inevitable and will bring great benefits to Wales. It is only just round the corner. We have a few little local difficulties, such as Maastricht, to overcome, but on the whole the British people, especially the Welsh, are behind those moves. We are going in the right direction, and my party welcomes the Bill.

Mr. Ted Rowlands: The Welsh Development Agency has been, is and, I am sure, will remain the development lifeline of communities such as mine. We find it difficult now to believe in life without the WDA. But sadly, however much of a lifeline it has been and still is, I have to report that in the past decade it has been unable to cushion us against or insulate us from recession and economic mismanagement.
The Secretary of State said today, as he has repeatedly said in the past, that we face a period of restructuring the Welsh economy because of the loss of jobs in coal and steel over the past decade. I remind him, and the House, that in my community over the past 10 years three times as many jobs have been lost from the manufacturing sector as have been lost from coal and from the closure of the last of the Dowlais iron works. It is not the collapse of coal and of iron in the past decade, but the collapse of manufacturing industry that was brought into our communities to replace the coal and steel jobs which has created the jobs chasm. That has been our major problem in the 1980s.
It could be argued that the problems of the early 1980s led to a need to restructure and to develop new production techniques in the manufacturing sector. That view was taken as much by the trade union movement in Hoover in my constituency as by management and by the Government. However, we rightly feel resentment and bitterness about the second recession and about the second destruction of jobs that is happening now. That is not a consequence of restructuring and it has nothing to do with coal or steel. The self-inflicted recession and loss of jobs are a result of mismanagement by the right hon. Member for Blaby (Mr. Lawson) and the Cabinet during the two years that led to a crazy commercial and property boom not in south Wales, but in other parts of the country. That had to be stopped by cripplingly high interest rates. In turn, that not only brought to a halt the property boom in the south-east, but brought about the sudden and disastrous decline of manufacturing investment in industrial and consumer goods. We have the right to say that the job losses suffered in the past 18 months have occurred as a result of mismanagement by the Government. The Welsh Development Agency has been unable to protect us from that.
The problem is best illustrated in my own community. Effort has been put in by all concerned, including the


Secretary of State, the Minister, the Welsh Development Agency, local authorities and myself. We have worked hard to attract new companies. It was announced recently that two new companies in my community, an exciting prospect, could bring in 170 jobs in the next couple of years. Last week, almost 100 jobs on one line were lost at Nancanco in Rhymney which almost wiped out the job opportunities provided by the new companies. What has happened is a result of economic mismanagement, not of demanding too high wage increases—Hoover workers have scarcely had a wage increase—or of bad industrial relations in the past two years. Workers' rights have been eroded week by week and month by month in our community. There is no citizens charter for people at work who are having to accept poor conditions and relationships. The jobs have gone as a result of economic mismanagement by the Government over the past two years.
Once again, we must try to bridge the jobs chasm which has emerged in communities such as Merthyr Tydfil and Rhymney. We turn to the Welsh Development Agency for support and assistance in bridging the jobs chasm. Two questions lie behind many of the speeches made by hon. Members. Where will the new jobs come from? How shall we attract them? If we can answer those two questions, we can identify the role of the Welsh Development Agency and of the money that we shall approve through the Bill.
Where will the jobs come from? Much has rightly been said about the need to attract inward investment and all communities in south Wales can demonstrate the success of inward investment. However, as my right hon. Friends the Members for Llanelli (Mr. Davies) and for Alyn and Deeside (Mr. Jones) have observed, the game is getting more competitive. Whether from central Europe or from other Community countries, there will be growing competition, and the competition to attract inward investment is already intense. We must not become over-dependent on a new wave of inward investment. In some ways, we do not need to be too dependent on new inward investment because within our own communities with the existing inward investors there are tremendous job creation possibilities.
I read with great fascination a recent publication by the Department of Trade and Industry, and I hope that the Minister, the Secretary of State and everyone in the Welsh Office has also read it. One had given up the Department of Trade and Industry, yet in June 1991 it published a document called "Market Opportunities for Electronic Component Manufacturers—A Study of Demand Created by Japanese Electronic Equipment Manufacturers in the UK". It shows that about £1 billion worth of components are feeding existing inward investment and that the figure will rise in the next four years to £1·7 billion. Hon. Members should think of the jobs potential if we can reach out and develop the contacts, and if we can create the manufacturing capacity to meet some of that demand. The Department of Trade and Industry document refers to local political pressures. I am delighted that somebody in that Department understands the issue, even if the Secretary of State for Trade and Industry does not. The document refers to the pressure that is being put on existing inward investors to diversify and to source in the local communities.
We have heard nothing so far about what strategy the Secretary of State and the Welsh Development Agency will adopt to gain a share of the magnificent Japanese

investment in south Wales and to benefit from the components potential of inward investment. Will we gain a share of the local sourcing? That could be a major area of job creation within our community. Everyone dismisses the sheds. I do not, and I am very glad that there are sheds in my area because we shall need many more if we are to fill the jobs chasm. Companies, whether local, United Kingdom or owned by inward investors, will come to the sheds to feed components into the first generation of inward investment manufacturing. We must appreciate that potential and we should not spend all our time chasing new companies, although we must do that to an extent. We must spend as much time building on the potential that has been identified even in dry Departments such as the Department of Trade and Industry.

Sir Wyn Roberts: I take the hon. Gentleman's point. Surely he must be fully aware that with many of the new inward investors, especially the Japanese, there was an insistence that a percentage of the materials should be sourced either in the United Kingdom or in other European countries. He will be aware that many companies in Wales, especially the Gooding Sanken Group, have taken advantage of that.

Mr. Rowlands: Yes. My point is that there is pressure for insistence on a growing percentage of local sourcing. We want a far more definitive strategy from the Secretary of State and from the Welsh Development Agency so that we can tap into the growing potential. Sony is now sourced heavily from within the United Kingdom, as is Nissan in Sunderland. One of the companies that is coming into my area will produce goods for the new markets and new opportunities created by the first generation of inward investors.
Are we moving to a new plane raising our sights and setting targets in view of the potential job creation in Wales resulting from those developments? Is there, for example, a view on the enormous Bosch development adjacent to the M4 within 15 minutes' journey time of my community? What strategy has been adopted to ensure that, as a result of the Bosch development, jobs in the components industry will be created in the community of Merthyr Tydfil? We cannot fit the Bosches into our valley communities. We do not have great land sites—we do not need them. We need to create 2,000 to 3,000 jobs as a spin-off from other investments. I should like a lot more. I should like to hear the chairman of the WDA and the Secretary of State overtly, deliberately and consciously in a planned fashion reaching out to the new potential market for jobs in our community. Perhaps they do so behind the scenes.
Unless the Minister of State can prove otherwise, the trouble is that, after all those efforts, information on the Welsh economy is appalling. The paucity of information about the Welsh economy strikes one. Those are not my words; they are the words of the most recently published document, entitled "Valley Skills", an inward investment study. That document came out of the Welsh Office last week, and it states:
The paucity of information on a number of basic issues is a theme running through this report".
The report makes that point very well. There is a paucity of information about what skills we have and what skills we need.
If there is enormous potential for jobs within the new inward investment that has already occurred, how will we


attract them? How will Merthyr, Rhymney, Neath, Pontypridd or Llanelli attract those jobs? There are two methods—one involves the role that the WDA has been and is playing, and with which it is only beginning to come to terms, as was mentioned by my right hon. Friend the Member for Llanelli. The first is a traditional method. I do not dismiss it. Perhaps my hon. Friends went too far in saying that we have the necessary property. I am not much interested in property, but I am certainly interested in land reclamation. I am certainly interested in the building of modern industrial real estate in communities such as mine, because at least one has something physical to offer and to market, and that is extremely important. That is why I was concerned about and interested in the WDA budget figures for the next couple of years.
In the public expenditure White Paper on the Welsh Office there is a decline in net expenditure by the Welsh Office to the Welsh Development Agency from £85 million or £90 million in 1991–92 to £64 million in two years. That is a drop of more than £20 million in the contribution from the Welsh Office. However, the figure for the gross budget remains at £160 million. It is for the Minister of State to justify the figures, but it seems that the budget will be sustained by increasing rents on new properties from £32 per sq m to £45 per sq m—a good contribution to industrial inflation. I must say—and by existing average rents of the whole portfolio rising from £15 to £24 per sq m.
The second method is a huge divestment of properties. I am not arguing the merits or demerits; that is not my concern at the moment. My concern is whether that will happen and, if it does not happen, what will happen to the WDA budget. The forecast is to go from the current sales this year of 74,000 sq m to 300,000 sq m. That will be three times as much property sold. My right hon. Friend made a point about preoccupation with property. There will be tremendous preoccupation to reach those figures. I cast doubt because the figure for 1991 factory divestment was supposed to be 209,000 sq m this year. The achievement is 74,000 sq m. Given that track record, it is reasonable to ask whether, if we do not reach those figures, and if there is a shortfall in factory sales, the budget will be made up by the Welsh Office and the Secretary of State in the coming year. That is all I ask, and I should like an answer to that question, because we are dependent on that budget.
A major new matter to which the WDA must pay attention is the attraction of our communities, as my right hon. Friend rightly pointed out. It gives me nightmares to watch our society being de-skilled and to watch many people's skills becoming redundant. I remember marching a couple of Fridays ago. Banners were being waved; it was a romantic moment. Pragmatically, I asked the chairman of the lodge committee, "What are you going to do?" He said, "I don't know yet. I am a trained electrician; I was trained by British Coal. The electrics that I know are totally redundant in the world outside. I was a good Coal Board electrician, but I am not an electrician for the new age. I asked British Coal, with all its job shops, to train me again. They said, 'No, we will not train you again, because we have already trained you once.'" From British Coal, British Gas and British Telecom and the South West

electricity board came a generation with good training skills. Privatised companies will let us down on training, just as manufacturing is letting us down on training.
One of the real ironies is what we read in many documents, the latest and glossiest of which is the strategic guidance from the Secretary of State, entitled "Skills and Enterprise: An Agenda for Wales". It was released yesterday. I thought that it was a Labour party policy document, it looks so good and colourful, but it is minus the content. It states:
The Secretary of State therefore invites Welsh TECs, working with the WDA and DBRW, to develop proposals for a coherent framework of services on skills that the development agencies can market to inward investors.
It is recognised that we shall need skills and market them to attract new jobs and new opportunities to our community. Training is supposed to be employer-led, but I must tell the Secretary of State that employers are not training. We are depending on the very people who have let us down. I do not say that that is the cause of the recession, but they have cut the money that has previously been spent on training. We are turning to a manufacturing and trading base that does not exist. If it exists, it has shrunk to a level that is incapable of sustaining a new training initiative of any character.
Another worrying matter—it relates to the electrician from Penallta—is that the type of training being offered is often out of date. I recently went to a fine training skills centre. It shook me rigid that people were being taught old-fashioned skills and on old-fashioned machinery. It is true that many of those people will go into factories with such machinery, so we are training for the here and now if not for the past, but there is a new generation of manufacturing, and production techniques. Hoover in Merthyr is demonstrating that. Any new inward investor will bring modern manufacturing training and machinery to our communities. We shall have to offer people who will understand and have a feel for that type of production and the training that goes with it, but who will prepare the new generation for the next five or 10 years? Who will help middle-aged redundant people in communities such as mine?
We do not have the manufacturing base or training programmes to go with it. That is why, in the summer, I wrote a special programme and prepared a detailed analysis of what would be a manufacturing training programme for a community such as mine. I put a proposal that we create a centre of excellence. I appreciate my right hon. Friend's point that we may have to send our people to Japan and elsewhere, but we could train them in our own communities, but that would require much more intervention and greater effort to create opportunities for our people. The WDA, alongside our TECs, will have to play a more fundamental part in educating the new generation so that, when we invite and attract new companies to our areas, we will offer not only major new industrial real estate, new factories, and financial assistance, but a community with modern skills, ready to attract modern industry to create a modern economy for the Wales of the 1990s.

Mr. Keith Raffan: I agree with some of the comments made by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), especially about the paucity of the information available to us about existing


skills in Wales, the skills that we need and therefore the importance of a skills audit. He is also right to say that it is at a local level that we can best assess the skills that are needed. My worry about the training and enterprise councils is that they cover too big an area. Sometimes the local authorities know best exactly what skills training we need. The district council in my constituency has played a dramatic role in our area's economic and industrial regeneration. There needs to be much greater integration between the local authorities and the TECs on matters relating to training and skills needed.
Although, as I have said, I respect some of the comments made by the hon. Member for Merthyr Tydfil and Rhymney, he will not be surprised if I disagree with him about the recession. He was unfair in looking at the British economy and British interest rates in isolation. My latest information was that the Labour party had been converted in its thinking on Europe. We must look at the British economy and British interest rates in the European context and bear in mind the fact that we are not the only country in an economic recession: other countries are in the same position.
In addition, the level of our interest rates is now directly affected by factors outside our control, ranging from the strength of the peseta in the exchange rate mechanism, the fact that the German Government have taken on the enormous task of regenerating east Germany with the consequent impact on Germany's interest rates, and even that, according to the chief of staff at the White House, President Bush may have made certain impromptu and spontaneous remarks on a golf course.
All those factors are outside our control but, in the global economic village in which we now live, they have a direct effect on our economy and interest rates. I am sure that my right hon. and hon. Friends on the Front Bench will nod their heads vigorously at that, because nobody could be keener to reduce interest rates than the Government, especially as we have only a few more months to run of this Parliament and we are desirous of re-election. As I have said, we must look at our economy and interest rates in an international context.
I must apologise to the House in advance for not being able to be present to hear the replies to the debate, but, like hon. Members of all parties, I am glad to have the opportunity to support the Bill. As my right hon. Friend the Secretary of State has said, there is no doubt that the Welsh Development Agency has made an immense contribution to the Welsh economy and to the industrial regeneration of the Principality. I have direct experience of that in my constituency, where the partnership between the WDA, the Welsh Office and the local authorities has been remarkable.
If I had to specify one local authority, I should like to pay tribute to Delyn borough council. That partnership has been to the enormous benefit of local people. I remember the dark days of 1985 and the closure of Courtauld's greenfield site where over 800 people were made redundant. That had a multiplier effect on the local economy, with a further 400 or 500 redundancies. Male unemployment in Flint and Holywell approached 40 per cent.
There has been a dramatic improvement since then. The local economy used to be far too concentrated on only three industries—coal, steel and textiles. However, thanks to the partnership between the Welsh Office, the WDA and the local authorities, it is now much more diversified. That

would not have been possible without the contribution of the Welsh Development Agency, especially in the Delyn enterprise zone and the Greenfield business park.
Public sector pump-priming has led to the regeneration of our local economy and is one of the principal reasons why the economy of Delyn is far more resilient in this recession. Our local economy is far more diversified and is therefore far more flexible and capable of resisting this recession, with the result that it is not having so terrible an impact on employment, on local families and on the entire social fabric of our community. Those dark days have gone. I am sure that we shall come out of this recession stronger than we were before, that the local economy will diversity still more and that it will therefore be strengthened still further.
I agree with the hon. Member for Ynys Môn (Mr. Jones) that it is important that, as the private sector takes over the provision of factory space in the more accessible areas—those with the better connections to the motorway network—the WDA follows the dualling of the A55 into north-west Wales. That is where public sector pump-priming is now needed. We have seen the creation of new, private industrial estates in north-east Wales—in Wrexham Maelor, and in Alyn and Deeside.
Although we do not always hear this from Opposition Members, those new private industrial estates and business parks have been a tremendous advance but they would not have been established without initial public sector pump-priming. That is what originally regenerated those areas and made it possible for the private sector successfully to become involved. We must now move that public sector pump-priming further along the north Wales coast, and into the rural areas, to help to regenerate those local economies also.
I join my right hon. Friend the Secretary of State in paying tribute to the WDA's extraordinary record on inward investment. Many countries may well have been seeking to establish plants in the European Community as we approach the creation of the single market, but the WDA has taken the initiative. It has not been passive. Thank goodness, the part of the organisation responsible for inward investment has been renamed Welsh Development International. At least one of the recommendations of the Select Committee on Welsh Affairs has been adopted. I am also glad that we now have a European office in Brussels.
It is amazing that, although the Government usually respond negatively to our Select Committee reports—we are now accustomed to that and can almost dictate the Government's response—a couple of years later, they undergo a Damascene conversion and come round to our point of view. It seems that the Select Committee is sometimes ahead of the Welsh Office. We can only hope that if the Select Committee comes out in favour of a Welsh Assembly, the Welsh Office will eventually follow us on that as well—who knows? The WDA deserves credit for its extraordinary achievement and active involvement in inward investment. The investment may well have been going to come to Europe, but the WDA has made sure that it has come to Wales and it deserves full credit for that.
I intervened in the speech of the right hon. Member for Llanelli (Mr. Davies) on the issue of economic and monetary union, on which he and I disagree. The right hon. Gentleman said that that would have a devastating impact on Wales, but he did not convince me. He did not give any specific details of how that would occur. My view


is that there will be a devastating effect on Wales if we do not have a single currency or join in economic and monetary union. If we remain outside, much of the inward investment in the Principality will be under tremendous pressure from their parent companies to relocate to the mainland of Europe.
My right hon. Friend the Member for Finchley (Mrs. Thatcher) has not commented on that. She concentrates on the symbolism of sovereignty, but I am afraid that I am less concerned about sovereignty, which to me is a commodity that is to be ceded, shared and pooled to the benefit of my constituents; I am more concerned about their jobs and future livelihoods. I am not concerned about the idealism of sovereignty. Indeed, we gave up sovereignty when we entered the Community—or, at least, we ceded or pooled some of it.
When my right hon. Friend the Member for Finchley signed the Single European Act, she ceded sovereignty. When we joined the ERM, we merged still more of our sovereignty with that of our partners with whose currencies we strongly linked our own. My right hon. Friend the Prime Minister and his two predecessors have all seen sovereignty as a commodity to be ceded, pooled, shared and merged to the advantage of our people—and long may that continue. Whatever they may say, that is what they have done, and that must continue.
We must not be left outside the inner currency circle, because that would have a devastating effect on the Welsh economy. The WDA's solid record of achievement in inward investment would be in danger of being undermined if we stand apart and are isolated.
I agree with the right hon. Member for Llanelli on what I hope I may call his overall view of Europe. We are not geographically well placed, because we are on the edge of the continent. The continent's centre of gravity is now moving eastwards. Following the unification of Germany and the opening up of eastern Europe, we are now facing a changed situation. That is why it is tremendously important that the Government strongly support the WDA—and other agencies in the United Kingdom, such as Scottish Enterprise—by increased investment in our infrastructure. This is crucial because, if we stand outside a single currency, inward investment might well relocate to the mainland of Europe. If we do not get our infrastructure up to scratch, we shall lose inward investment, particularly to the so-called golden triangle between London, Paris and Hamburg—principally, the Pas de Calais area.
The Select Committee held an inquiry into the impact of the channel tunnel on Wales. Members who were involved and took part in the visit to France will be well aware of how much further ahead the French are in providing the infrastructure for the tunnel at their end. In terms of both rail and road connections, I estimate that the French are 10 to 15 years ahead. I find this frightening.
At a meeting, the French ambassador talked about a second channel tunnel being started within two years of completion of the first. I wish that we had that kind of positive thinking that, in the words of Iain Macleod, when the ball rolls our way, we would grab it and run. We have not done so in regard to infrastructure. There is therefore a danger that we shall lose out. However much the WDA

does about inward investment, if our infrastructure is not up to scratch, we shall be in great danger of losing future investment projects to the mainland of Europe.
We heard from the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) about land reclamation and industrial dereliction in south Wales. Great sacrifices have been made by the Welsh people and the Scottish people at various times in our recent economic history, in the interests of the nation as a whole. It it time for the people of Kent to realise that we have made sacrifices for the British economy and the welfare of our people in terms of connections, especially freight connections, between the channel tunnel and London—and beyond, to the Principality and further north. It is perhaps now the turn of people in the south to make a similar sacrifice.
I do not for a moment underrate the importance of the environment, but it must not be allowd to obstruct what is essential to the future economy of our country. The French have a highly centralised planning system compared with ours, and I do not wish to impose that on our people, but we must take a more positive attitude, make a more determined effort.
When the people of Amiens rise in protest and march down their streets it is because the high-speed connection to the channel tunnel does not go through their town but bypasses it. I do not expect the people of Kent to go to that extreme, but there must be a change of attitude. We must get our infrastructure right and do so quickly; otherwise, we shall lose out permanently.

Mr. Livsey: Will the hon. Gentleman comment on British Rail's announcement last week that passengers from south Wales to the continent will have to get off the train at Paddington and go by underground to Waterloo? In the Welsh Select Committee, the chairman of British Rail promised us that we would have cross-platform changes at Waterloo. Will the hon. Gentleman comment on the fact that one hour will be wasted in the passage from south Wales to Paris?

Mr. Raffan: We discussed that with the Minister for Public Transport in the Select Committee. Ministers sometimes change jobs so quickly that I cannot keep up with who is in the post. Several important points came out of that Select Committee discussion. I am sure that the hon. Gentleman will understand that I want to avoid getting bogged down in detail, but it appears at times that the Department of Transport looks in a blinkered way at the transport problems of London, such as the rail link to Heathrow, and new tube links, without co-ordinating them and integrating them into the channel tunnel network. We need a much more integrated and coherent transport policy.

Mr. Deputy Speaker (Sir Paul Dean): Order.

Mr. Raffan: I will bring my speech directly back to the WDA. I will forgive the hon. Gentleman for having distracted me.
If the WDA is to be given every opportunity to do what it should do for the economy of Wales, it must not be held back by a lack of adequate transport infrastructure. A team effort has been made to attract inward investment, and in Delyn it is between the WDA, the Welsh Office and the local authorities. Equally, in the all-Wales context, there is a partnership between the WDA, the Welsh Office


and Government Departments in Whitehall. Others are involved. We cannot consider what the WDA does in isolation.
Economic development and our ability to attract inward investment can be held back by a lack of adequate infrastructure, which is the Government's responsibility. Now that we have a Prime Minister who travels by rail, perhaps we shall see dramatically increased investment in the railways in the years to come.
My right hon. Friend the Secretary of State spoke about a Europe of the regions. He mentioned the strong relationship that he and his fellow Ministers had built up with the four motor regions of Lombardy, Catalonia, Baden-Wurttemberg and Rhône-Alpes. I am strongly in favour of all those developments, but I would like to hear from the Minister more detail about how the Welsh Office sees the Europe of the regions liaising with the WDA, and the impact of the one on the other.
My right hon. Friend the Secretary of State spoke in a recent speech on the periphery of the Conservative party conference about the need for an inter-regional body, although he was vague about its aims and powers. It would be an advisory body which would enhance accountability and administer structural funds. I should like to know how such a body might affect the WDA.
Infrastructure is, of course, also important in each of our constituencies. I worry about the division of responsibility for roads between the Welsh Office and the counties. The two do not necessarily integrate their road construction plans. The hon. Member for Wrexham (Dr. Marek), who is not here at the moment, and I have occasionally worked in tandem. We have sometimes shocked the Minister of State by appearing in his office together to discuss this issue.
I have long been worried by the lack of access link roads between the A55 and the industrial estates in my constituency and the tourist areas. If the vast investment of £500 per head—not all of which was spent on the Conwy tunnel—on dualling the A55 is to be worth while, we must have adequate link access roads. We must also have an improved British Rail network, especially in the north of the Principality.
I do not wish to digress too far, but the matters to which I have referred are crucial to the WDA. The agency cannot go to a potential inward investor—whether from overseas or from England—and seek investment without adequate infrastructure. That is the part which the Government must play in the partnership.
The Point of Ayr colliery in my constituency is the last remaining pit in north Wales. It was recently announced that it would switch from the long wall system of mining—I shall not give way to any technical interventions from the hon. Member for Pontypridd (Dr. Howells) on this matter—to the pillar and stall or board and pile system. I am relieved that the hon. Member for Pontypridd is still nodding in agreement. I have been briefed by British Coal on these matters, which is more than can be said for the shadow Secretary of State for Energy.
This change will secure the future viability of the pit. It involves a significant investment. The pilot scheme will involve investment of £2·3 million. Sadly, the new tunnelling method is not labour-intensive, so at the end of 1993 the work force at Point of Ayr will be reduced from the current 496 to just under 300.
It is important that the WDA responds to this situation. We have had the announcement in advance, so we have

time to prepare for the loss of jobs. I am grateful for British Coal's reassurance that there will be no compulsory redundancies. The job losses will affect not only my constituents but those of the hon. Member for Wrexham. The homes of the work force are spread over a wide area. We look to the WDA to work closely with the British Coal enterprise, which also does an important job. Again, a partnership can ensure that the impact of the redundancies on the local community is minimized. We must help those miners who are enterprising and want to start their own companies, and attract other investment into the area. We must ensure that those redundancies do not have a dramatic impact on the fabric of social life in the community. That is important, and I hope that my right hon. Friend the Minister of state will also be able to respond.
I am trying desperately to make an unprovocative speech as I am demob happy, but I could not help noticing that the Labour leader of Clwyd county council, Councillor Dennis Parry, said that he would seek a commitment for further investment from Lord Haslam. He seems to be a little out of date: British Coal's chairman is now Mr. Clark. The board of British Coal has already accepted a proposal for further investment at Point of Ayr. I hope that Mr. Parry and I will contact Mr. Clark together. I have already spoken to British Coal. British Coal and the Welsh Development Agency need to work together to minimise the impact of redundancies.
I am prepared to give the Labour party the credit for setting up the WDA, if Opposition Members are prepared to give us credit for the zeal of the converted in providing it with considerable resources over the past decade. Opposition Members, including those on the Front Bench, have welcomed the increased resources and the great good use to which they have been put to the benefit of the Welsh people.
I do not want to enter into past arguments. There is no question of the WDA disappearing, or of its offices abroad being closed, now that my right hon. Friend the Member for Chingford (Mr. Tebbit) is no longer Secretary of State for Trade and Industry. If ever there was a tribute to the effectiveness of the WDA, it was when he was groaning grumpily about the unfair advantage WDA offices overseas gave us in attracting inward investment into the Principality. Backhanded though it was, there could be no greater compliment to the effectiveness of the agency and its leaders.
My right hon. Friend the Secretary of State mentioned the enormous amount of money that has now been spent by the agency—more than £1 billion. I am concerned about the accountability of the agency, not merely to the Government but to the House. Ultimately, it must be accountable to the House.
I would not want the Select Committee on Welsh Affairs to be so ineffective that, like the Scottish Select Committee, it might as well not exist. It should be reconstituted. We must move away from the present position that membership of the Committee is in proportion to party membership in the House as a whole. It should be formed in proportion to party strength in Wales alone. The Government should not worry about that. If the Welsh Select Committee is to be effective, it should be constituted in proportion to the number of hon. Members each party has in the Principality.
I am in favour of effective Select Committees, although I am not in favour of serving on them for eight years—as I had done until my resignation earlier this year. One


Parliament is the maximum time that any Member of Parliament should serve on such a Committee because it involves a heavy work load.
On the WDA and its accountability to this House, it is important that the chairman and chief executive of the WDA should appear regularly before the Select Committee, especially when such a large amount of public money is being spent. We adopted the Select Committee system from the United States. I shall not enter into the controversy that has appeared in the press about who stayed at what hotel between what legs of an inward investment mission. It demeans hon. Members to make such comments. I hope that we can all rise above that.
The chairman, the chief executive and their colleagues in the WDA work hard and do a good job. However, the appointment of the chairman and chief executive are of great importance. They are responsible for the disbursement of such large amounts of public money that they should be subject to hearings in Select Committee, although those do not have to be as grandiose and pompous as confirmation hearings in the United States. That would be an improvement in the workings of the House.
That might get us away from small-minded early-day motions and the petty personal criticism of the people involved. With hearings there would be some sort of cross-party consensus on appointments, so the appointee would be more likely to be above the party political fray and less liable to be dragged down into it so frequently.
Select Committees should have greater power. I hope that my hon. Friends on the Treasury Bench will consider that—especially the Whip on duty, who is busily writing at a rapid rate and I hope is including all these constructive thoughts in his notes, although the Government may not like my suggestion, because it diffuses power, taking it away from the Government. However, greater accountability would ensure the better working of the Welsh Development Agency.
How can we make the agency fully accountable? By setting up a Welsh assembly. I am almost a lone voice in this cause on the Conservative Benches. I am not worried about that. I do not say that where I go others will necessarily follow, although other Welsh Conservative Members are in favour of various forms of devolution. Ultimately, the WDA and all public sector bodies in Wales should be answerable to an assembly. That would lead to more effective, efficient government and would ultimately help the agency. That will come.
I am not saying that where Scotland goes, we shall inevitably follow, but the intensity of the debate in Scotland convinces me that it will not be long before an assembly is set up there, whatever may be said from the Government Front Bench at the moment, and that ultimately Wales will follow. I hope that the Government's conversion to the setting up of assemblies in Wales and Scotland will be as wholehearted, as convincing and as financially generous as our conversion to the establishment of the WDA.

Dr. Kim Howells: It is always a pleasure to follow a thoughtful speech and there are rarely any more thoughtful than those by the hon. Member for Delyn (Mr. Raffan). He suggested a number of challenging ideas. I

certainly do not agree with them all, but he always makes me think. I wish that I heard that sort of speech more often from the Conservative Benches.
We have heard many condemnatory and self-righteous statements about attacks on various people. Wales is a small land. One of our great arts is probably gossiping about each other and we are brilliant at sticking knives into each other. There is no question about that.

The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett): Surely not?

Dr. Howells: The hon. Member for Pembroke (Mr. Bennett) is one of the finest knife wielders that it has ever been my pleasure to encounter.
The chairman of the Welsh Development Agency is as tough a cookie as I have ever met. I am sure that he is well able to handle himself in any situation. As a believer in blood being thicker than water, I shall say little about him because I go mountain climbing with his first cousin. Although they are on opposite sides of the fence politically—about as far apart as it is possible to be—when one is dangling at the end of a rope and has fears about family ties, caution is needed.
The WDA has done a splendid job. It has helped enormously to transform the Welsh economy. We have heard about the high quality of inward investment that has come to Wales. The big search is still on and has brought record bonuses this year for more inward investment.
The WDA has been responsible for ensuring that the investment that has come to Wales has gone out with more added value. In the case of the best inward investment, we have added value to it and we can begin to sell it abroad. That must be a critical aim of any inward investment.
I understand from the agency's publications that it aims to "grow" small and medium-sized firms—that is a gardening term that it is now common in business. Wales has about 3,000 firms employing between 50 and 500 people. About two thirds of them are involved in manufacturing industry and about 1,000 are in the service sector. It worries me, however, that, although the WDA has played a positive role in trying to make those firms grow, it is subject to some criticisms. I do not want to criticise the disasters that we have seen—the Parrot corporation, the fly-by-night cowboys who came in, took the money and ran, and the bad investments. They are bound to happen. The point of the hon. Member for Delyn on accountability is important in that respect. Select Committees have an important role in monitoring that side of the business.
Some matters perplex me and I hope that the Minister can help. I see that he is having a briefing at the moment, understandably. Some time ago some colleagues and I sought clarification from the Welsh Office about why the WDA could help, for example, a Japanese firm seeking to settle in Wales and to develop its business, yet could not help, let us say, a group of coal miners who might wish to take advantage of the dearth in supply of high-quality anthracite by opening up a new mine or expanding an existing small mine. There have been serious problems of that sort.
Several private firms have approached British Coal, which has a monopoly in these affairs. It is the only body that can issue licences to mine coal. Those firms approached British Coal with a view to purchasing mines that British Coal had closed or intended to close. They


were treated appallingly. For example, Ryans International, a firm based in St. Mellons in Cardiff tried to purchase the Blaenant colliery in the Dulais valley and the Cwmgwili colliery in the Gwendraeth. Both mines have substantial reserves. Both suffered badly from the inflexible technological approaches that the hon. Gentleman mentioned with regard to Point of Ayr. Yet, those firms were denied the opportunity to employ men and mine the coal profitably, not simply on a British or European basis, but on a world basis. Ryans International is confident that it can produce coal at sufficiently low prices to export it to European member states. The price might be as low as £20 or £25 a tonne. I understand that as many as 600 jobs could be tied up in such a project in the Vale of Neath alone. The WDA should have a role in that.
Wales has gradually struck away from its identity as a coal mining area. That is fair enough. None of us wants to go back to those dreadful days of colliery accidents and pneumoconiosis—that image of Wales. We want to nurse our resources in the best way possible and to bring into fruition a new era of coal mining. That new era could be led by such projects.
If we are prepared to risk capital on firms from the other side of the world or on individuals with appalling track records, without checking up on them before giving them money, we should think seriously before turning down the justifiable approaches of companies with great experience in mining which could do a good job.

Mr. Denzil Davies: There seems to be a tendency to disparage coal completely. The new high-tech industries are fine, but the anthracite coalfields could be developed. Does my hon. Friend agree that the WDA is well placed to help in that development?

Dr. Howells: I could not agree more. My right hon. Friend makes the point clear. The Government must think seriously about what they will do with British Coal's right to hand out licences.
British Coal is retreating from south Wales for bad, unimaginative reasons. The Government are not being energetic and intervening to ensure that it stays. The Government could intervene by encouraging the WDA to recognise the best projects that have been mooted by people who are interested in mining coal in south Wales. If British Coal will not mine it, let some one else do so. Those are revolutionary words from these Benches. I am advocating competition—competition against a monopoly that has done no good whatever in south Wales, certainly not in the past decade.
I hope that the Minister will look carefully at that and perhaps give the WDA the right at least to begin considering the matter. Some of our hardest-hit areas could be helped and much could be done to alleviate the criminal prices that we are paying for specialist coals such as anthracite and coking coal.
I congratulate the agency on its achievements in the environment. I know that that has been played down and earlier the hon. Member for Cardiff, North (Mr. Jones) pooh-poohed it. As my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) pointed out, the transformation of the landscape plays a great part in transforming the mentality of people. It is important to eradicate the worst of what we have had to put up with for years. That is one of the WDA's great achievements.
To revert briefly to what I was talking about a few seconds ago, there is a hidden agenda on mining. It is that we should extract that anthracite and coking coal by opencast coal mining. There is an alternative. People are ready to mine coal just as cheaply, but without ravaging our landscape. The WDA has done enormous work cleaning up our landscapes, especially our derelict areas. It would be short-sighted and criminal to undo that work, albeit temporarily, simply because there is not the imagination to put forward an alternative way of extracting it.
I hope that the WDA will be given the means to help local authorities move on to the whole business of cleaning up the environment. I know that it is keen not merely to take away the slag heaps from the mining and steel industries, but to help local authorities to clear up the stench from chemical factories, the dust from steel works and so on. The agency plays a central role in all that and I hope that it will continue to do so.
My hon Friend the Member for Merthyr Tydfil and Rhymney asked about the sale of property. I understand that the administrative budget is about £167 million a year. In the current year the WDA is expected to raise about £35 million from the sale of properties and next year it is to raise £50 million. My hon. Friend's analysis of future provision of factory space and so on was good. I wish to ask a different question: what will happen when the Welsh Office, understandably, pushes for a higher proportion of funding to come from the sale of property? What happens when it has no property left to sell? We shall, indeed, be considering the construction of empty sheds, as the hon. Member for Cardiff, North described it. I should like some answers on that.
I am troubled by rumours. I know that Members of Parliament should not listen to rumours and I do not expect Ministers to confirm them. I have heard from various management consultants that it is said throughout the Treasury that the WDA's budget is large. Questions are perhaps asked about whether it should be reduced, whether the agency should be broken up along the lines of Scottish Enterprise, which is a disastrous reorganisation, or, at the very least, whether the agency should have its property function—a major generator of income—hived off.
The WDA is focusing on the right targets. For example, it is seeking to improve a woefully inadequate skills base in Wales and is trying to promote technology transfer, about which we have not heard much in the debate. Our technology transfer infrastructure is a grossly under-developed sector in Wales, as it is in most regions of the United Kingdom. The WDA is also forging European links with some of the most robust regional economies in Europe. The aims are to develop new opportunities for Welsh firms and to learn about the best practice available from some of the more innovative continental development agencies.
While those initiatives do not have a direct job creation role, and might therefore be subject to some criticism from the Treasury, they have potential for generating employment in the longer term as well as enhancing the innovative and competitive basis of the Welsh economy.
One of the most crucial areas of the initiatives—as mentioned in the excellent contribution of my hon. Friend the Member for Merthyr Tydfil and Rhymney—is the issue of training on a Wales-wide basis. The Welsh Office has now absorbed the training, enterprise and education


directorate. The north-west region of Britain has a good regionwide training and enterprise council network, with a single contact person to liaise with the EC in Brussels. That point was made well by my hon. Friend the Member for Alyn and Deeside (Mr. Jones). That is an extremely important development and one must ask what is happening in Wales on that front. As a region, what are we doing in Wales to exploit EC training opportunities? Will the Welsh Office now play a more co-ordinating role, with the help of the WDA, in that sphere? Although I feel that the WDA would like to play a co-ordinating role with the TECs, that idea has been largely ruled out by the Welsh Office, which of course wants a hundred flowers to bloom, so to speak; it would like each TEC to do its own thing. The training places that have been cut out by the TECs should be restored as soon as possible.

Sir Wyn Roberts: It might help if I cleared up that point immediately. The co-ordinating role for education and training clearly belongs to the Welsh Office. The TECs have been established, as the hon. Gentleman is well aware, but he will also be aware that the strategy document mentioned by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) refers to the strategy being related in particular to inward investment. The hon. Gentleman will be further aware of our co-ordinating role in the Welsh Office on further and higher education, following the passage of the Further and Higher Education Bill which is now in the other place.

Dr. Howells: I thank the Minister for that useful piece of information and I am glad that the Welsh Office has moved in that direction. But there must be far greater co-ordination, if only between the work that is going on in the WDA and the other areas to which I referred. I have grave doubts about the wisdom of TECs doing their own thing without that co-ordination. I can see the virtues in allowing more local identification and initiative, but it needs more macro co-ordination.
On the whole issue of technology transfer and innovation, the WDA needs more support from the Welsh Office to promote the take-up of United Kingdom and EC funds. For example, the take-up of Department of Trade and Industry schemes for innovation and technology transfer appears to be very low. I shall be interested in anything the Minister can say about that.
The Welsh Office take-up of research and development funds from the EC is similarly low. That was exposed recently in an article in The Western Mail. Again, it is a Welsh Office rather than a WDA responsibility and I hope that the Minister will explain what the Government intend to do about that crucial area.
A number of issues affecting the Welsh economy should be aired. The first and foremost is how Wales is faring in the current recession, which is undermining much of the positive work that has been done in the past six years. Although the recession hit Wales later than some other regions, notably the south-east of England, we are also in the midst of it now, witness rising unemployment since the spring of 1990.
The hon. Member for Cardiff, North, who unfortunately is not in his place, made the interesting point that this week's fall in the Welsh level of unemployment was the first since April last year. There have been rising business

failures and falling output. It would be interesting to know how Wales compares with other regions on those three critical indices.
I hope that hon. Members in all parts of the House appreciate that that is not trying to talk down Wales. It is trying to address the continuing fight to restructure the Welsh economy in such a way that its reaction to recession and downturn, when it occurs, is stronger than at present.
Apart from the current recession, there is the deep-seated problem of low per capita income in general and low pay in particular. Those points were made by my right hon. Friend the Member for Llanelli (Mr. Davies). The low per capita income rates in Wales have not improved. Indeed, I understand from Welsh Office statistics that real wages in Wales have been declining relative to the rest of the United Kingdom and they seem to be declining in some of our key industries, such as electronics and motor components.
It would be helpful if the Minister would provide figures for Wales relative to the United Kingdom as a whole, for our recent success in attracting inward investment may have been due as much to low pay as to anything else. I hope that that is not true, but it may be true and it seems that it could be playing a part in recent developments.
In the inward investment battles of the 1990s, Wales will not be able to compete with the new low-cost zones of eastern Europe. Nor should we want to compete on that basis. I suggest that we concentrate, in terms of the economy, on unemployment and real wages, which are two critical indicators of well-being. They are not to be denigrated by any suggestion that Opposition Members want to talk down Wales. We need an improvement in our vocational education and training system to improve the take-up of United Kingdom and EC policies for research, development, innovation and technology transfer. We must improve the evaluation of WDA and Welsh Office initiatives.
We have too little information in those areas, an information deficit which is no small academic matter, for unless we know where Wales really stands compared with other regions of the United Kingdom, we shall be subjected to the kind of economic miracle hype that we have had for the past 10 years and are still getting.
We have made some great strides towards creating a new identity for the economy of Wales and the WDA has played a part in that. But there is still a long way to go. We can build on the great strengths that we have and I hope that the Government will ensure that the WDA continues to play a central role in that construction.

Dr. Dafydd Elis Thomas: The two interesting and analytical speeches of the hon. Members for Delyn (Mr. Raffan) and for Pontypridd (Dr. Howells) will be good reading for the board, chief executive and chair of the Welsh Development Agency. They pinpointed a number of issues to which I shall return, in particular about information research and the links between development and job creation and investment and higher education.
It is extremely important for the Welsh economy in connection with economic and monetary union that we move rapidly to integration in the European Community economy and society. Out of that will come stability for


Wales, provided that we strengthen regional policies within the Community so that we do not become a periphery of a periphery.

Mr. Christopher Gill: While it is generally accepted that, if a single currency is adopted, a massive amount of funds will have to be transferred from the richer to the poorer countries, has it occurred to the hon. Gentleman that, in the context of a wider Europe, the regions of the United Kingdom may no longer be regarded as the poorer parts of Europe? Rather, the transfer of funds would be from the northern countries to the much poorer countries of southern Europe.

Dr. Thomas: I am aware of the debate on regional policy, which is why the Opposition Members who have just spoken have all argued for strengthening the regional infrastructure rather than depending on transfer payments. I regard transfer payments as a transitional phase in regional policy because, unless a region can become more self-sustaining in terms of its development, its future cannot be guaranteed. I do not wish to enter an argument in which people say—some hon. Members seem to be expressing this view today—that investment should not take place in the southern states of the Community, new member states, or east Germany because that would disadvantage Wales. We need to ensure that all those regions have a more sustainable level of development. That is the challenge that we must face in the third generation of European regional policy.
The Welsh Development Agency allows us to have a flexible form of intervention and partnership with the market economy. It is a tribute to the nature of Welsh public policy culture that the agency and the Welsh Office, far from becoming restricted in their activity under the Conservative Government, have widened and deepened their activities. It is not sufficiently recognised by those who look at the Welsh political system from the outside that Wales has developed a distinctive way of operating. It is a kind of 1960s corporatism without some of its worst features. The tenure of the right hon. Member for Worcester (Mr. Walker) symbolised that. The bringing together of trade unions, management, local authorities and the agencies is a feature of the scale of Wales. Bringing together those activities has enabled decisions, particularly on the location of projects, to be made faster than they have been made elsewhere.
We have already heard about the links between the regions of Europe. Wales has got in on the act because, when areas such as Cataluña were seeking a partner in the United Kingdom, its governmental infrastructure was already in place, albeit not with the democracy that exists in Cataluña with an elected Generaletat or Parliament. So it was possible for the Government of Cataluña and the other regions to relate directly to the Government of Wales in the Welsh Office. I shall ask the Minister to report hack from Cataluña later.
Our political culture has enabled us to develop internal and external infrastructure. The Welsh Development Agency has played a key role in that and has taken its particular form of partnership intervention in all sectors of our economy. I was interested in the latest development, perhaps not of post-socialism but certainly of post-Marxism, which was outlined by the hon. Member for Pontypridd when he proposed competition in the energy sector and challenged the WDA and the Welsh Office to

allow it to take place. Within a residual public sector, it is important that agencies such as the WDA can play an innovative role. If the new monopolies that are created out of privatisations are not to be responsive to the needs of a smaller scale activity, the WDA should be able to intervene flexibly.
The WDA's activity in relation to multi-national capital and inward investment has been discussed at length. I shall not repeat the points that have been raised except to say that, with the current international movement of capital within the economy, it is crucial to test how effective the agency's international role has been and is. The need to target potential investors and growth sectors more accurately arises now that we are in recession.
I am particularly interested in highlighting the WDA's activity in relation to small and medium sized enterprises and the so-called "third sector"—community enterprise and co-operation. I declare an interest because of my involvement with several of those community enterprise agencies in Wales and the WDA's activities with them. The agencies work, especially its rural initiative programmes, shows how bottom-up incentive activity, which is mobilising resources and capital within the community, can lead to effective small-scale job creation. At that level and at the level of small and medium size enterprise, the technology transfer question and the development of infrastructure are particularly important. Technology transfer means not only large-scale transfers but also transfers to smaller enterprises—sometimes single, two or three-person enterprises—which can provide a stable economic growth in a peripheral niche of the economy.
An infrastructure does not mean simply the magnificent Sir Wyn Roberts' memorial tunnel at Conwy, but also the essential need to ensure that we have information technology and telecommunication networks throughout Wales. The rural development initiatives are so important because, as we look to the future, we see that it is now possible, through new technology, to establish effective businesses and communicate effectively. The development of the so-called telecommunications cottage industries is important to the peripheral areas of the Welsh economy. The WDA and the Development Board for Rural Wales are keenly involved in that sector. The Minister of State and I hope to attend a conference tomorrow when I hope that he will make some announcements about that sector. In the past 10 years we have developed a network of local enterprise agencies which come together in a national organisation. There again, Welsh Office, WDA and DBRW support is crucial. Those activities have been tapping entrepreneurial resources that were not obviously present within the Welsh economy. It is important that the Welsh Office should continue to encourage that.
The international role of the agency and the Welsh Office is one of the most exciting developments of recent years. It includes the relationship between Wales and the four motor regions of Baden-Württemberg, Cataluña, Rhône-Alpes and Lombardy. That activity represents the future development of regional policy within the community—

Mr. Morgan: Was the hon. Gentleman about to confirm what I was saying, that the motor regions would not let Wales join their group because they thought that we were the exhaust pipe while they were the motor car?

Dr. Thomas: The hon. Gentleman knows that the Welsh Office concluded agreements on a range of activities with Baden-Württemberg and Cataluña. I understand that further agreements are to be made with another two regions. Far be it for me to speak on behalf of the Welsh Office, although I am willing to do so if called on. I am sure that the Minister of State will come back to that point when he winds up the debate, and give us a report on his latest visit to our friends in Cataluña.
Direct relationships with regions is crucial to the future regional policy within the community. As the hon. Member for Delyn said, the opening of the Brussels office was something that we proposed a long time ago in Select Committee. It shows how the structure of government in Wales, through the Welsh Office and the agency, can link directly with mainland activities in the rest of Europe. That seems to be the way in which future patterns of co-partnership investments in those regions should develop. That will lead to further diversication within the Welsh economy.
I wish to emphasise not just the networking with smaller-scale businesses and the private sector, but the need to relate the activity of the agency, to education and training. That subject has been touched on and I shall pursue it because we now have the opportunity to create for the first time an integrated education and training system for Wales. It all rests with the Welsh Office, which has responsibility for training education, including further and higher. I want the Welsh Office to develop an innovative strategy. I shall expand the point when we discuss a Bill which is not yet before the House, but is in another place. I hope that the new higher education funding council will direct its funds to sectors of innovation in research and development. I believe that the University of Wales has let us down badly over the years in terms of its so-called priorities in research and development. I speak as a graduate and postgraduate of that university.

Dr. Kim Howells: Does the hon. Gentleman agree that one of the most extraordinary claims from the Welsh education establishments and, indirectly, from the Welsh Office was to laud the decision by Imperial college, London to open a science park near Newport? I am sure that the hon. Gentleman could tell me why the University of Wales did not open a science park near Newport—or anywhere else for that matter.

Dr. Thomas: I shall return to that point on Second Reading of the Further and Higher Education Bill. The University of Wales has not given sufficient priority to exploring opportunities for research and development related to the technological and economic needs of Wales. There are exceptions to that, such as research relating to the countryside and agriculture. However, I hope that the people now responsible for co-ordination of the federal structure of the university will investigate that issue; otherwise, many of us will argue that the federal structure of the university will become redundant once there is a higher education funding council.
When the new funding mechanisms—all of which are answerable to the Welsh Offce and the Secretary of State —are in place, I hope that the Welsh Office will ensure that it has a strategy and a set of priorities. One of the priorities must be to develop a better relationship between the formal education sector of further and higher education,

and training and enterprise councils. I welcome the activities of the TECs, but I am worried that we are not identifying the types of skill already available sufficiently clearly as a package when we consider further education opportunities. I agree with what was said earlier about the need to be sensitive to where the available skills are located and to the fact that the regions covered by TECs may be too large. We need an integrated approach to the levels of skills.
We also need to look to the agency and its continuing role in derelict land clearance and environmental activity. I should like the agency to develop its role so that it not only clears derelict land but develops the greening of its policies. We do not want the next generation of development in Wales to damage the environment. The European Community and the Government both have green priorities, but it is essential that all new and existing projects should be subject to a full environmental audit.
Any strategy for development must be a strategy for sustainable, resource-balanced development. Green priorities must be an integral part of the agency. Greening is not additional to economic activity but an integral part of it. The cost benefits of each project and development must be related to ecological cost benefit as well as any other cost benefit calculation. Wales still lags behind in terms of environmental assessments of new projects and the effects of existing projects.
I wish now to raise a constituency matter which will come as no news to the Minister of State or to other hon. Members—an ecological problem caused at Trawsfynydd. The nuclear power station has not produced electricity since at least February. A decision will be made sooner rather than later on whether to decommission the site within the national park. Clearly, serious choices will have to be made on the decommissioning aspects and the timetabling of the decommissioning. I shall not go into them in detail now, except to say that the decommissioning and cleaning out of that site must be done to the highest environmental and safety standards, and must be done completely.
There is no way I would accept a decision to maintain radioactive materials on that site in perpetuity. Much has been made of the Welsh work force and I would not accept it if the local work force at the site were gradually made redundant without an effective programme of alternative employment. I have called on a number of occasions, and do so again, for a similar policy attitude towards electricity generation closures such as that at Trawsfynydd as we have had in the past towards steel and coal closures.

Mr. Barry Jones: indicated assent.

Dr. Thomas: I am glad to have the support of the hon. Member for Alyn and Deeside (Mr. Jones).
That district has, over a long period, had an almost mono-economy derived from the major extracting and generating industry. That employment potential will be lost and there must be a response to that. The Development Board for Rural Wales and the Welsh Development Agency—the border cuts across the travel-to-work area of the power station—and the Welsh Office must be directly involved in the creation of alternative enterprise.

Mr. Alan W. Williams: The hon. Gentleman knows of my interest in the matter. He knows that the Trawsfynydd power station has been closed down


since February because of technical problems and so on. I notice that the hon. Gentleman talks about decommissioning and the severe employment problems that would ensue. Is he of the mind that the Trawsfynydd power station should be decommissioned?

Dr. Thomas: That is a matter not for me but for the nuclear installations inspectorate. It is for the Nil to decide at what stage a site licence should no longer be given to that station. I suspect that it is not far from making that decision. It is a technical and scientific decision, but clearly it has environmental implications. I make it clear that I have strongly opposed the Secretary of State's decision to establish an incinerator for low level waste on that site. Although that would deal with material from the site, it would proliferate radioactivity on the site and that is something to which we should object.
To return to the employment implications of the closure which are so relevant to the debate, I hope that when the Minister replies he will say that adequate funds will be made available. My nominated successor, Mr. Llwyd, talked about a figure of £10 million. Whatever the figure is, the Secretary of State should have an appropriate figure in mind for alternative investment. But the form of alternative investment should not be considered as another major construction project. The problem of the diseconomies in Gwynedd for major construction projects has to be tackled. The north-west and mid-Wales economies need a diversity of small and medium-scale enterprises, not a reliance on major construction work. The agency, Antur Dwyryd, whose representatives we shall be meeting tomorrow, has a particular role to play because it is a locally based enterprise agency and is well able to assist small-scale enterprises in the locality to take advantage of whatever funds may be available. The role of the WDA is to be the big partner of those smaller-scale activities. The agency is well capable of doing that and I am pleased that we shall this evening vote more funds for that activity.

Sir Anthony Meyer: I should be grateful to you, Mr. Deputy Speaker, for calling me to speak, but I am not particularly grateful to you for calling me after the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas). Every time I listen to one of his speeches I feel obliged for good party political reasons, to find something about which to disagree with him and I find it harder on each successive occasion.
The hon. Member for Cardiff, West (Mr. Morgan) has made one of his fitful appearances in the debate. Fortunately, he is not even doing me the courtesy of listening to what I have to say. It gives me no pleasure to say it, but I regard his allegations against the chairman of the WDA—trivial, footling allegations which have attracted undue publicity—as reflecting no credit on him, damaging to Wales and damaging to the causes in which we all believe.
There has been much play, particularly at the beginning of the debate, about people changing their minds. To my embarrassment. I recall speeches that I made when the WDA was first set up in 1976. I spoke about the unfulfillable expectations that it would arouse. In the end, I was glad to be proved wrong. Because of the policies that have been pursued by successive Conservative Secretaries of State for Wales, we have managed, in many senses, to

have the best of both worlds. Beginning with what might be called "Walkerism" and what is now "Huntsmanship", we have had Conservative Secretaries of State who have not hesitated to make use of the limited interventionist role that the WDA can exert. It is, as my right hon. Friend the Minister of State said, a very different animal from what it was when it was first set up by the Labour Government.
Now that the Government have adopted a middle course, I ask myself whether, were a Labour Government ever to be returned to office, which still seems dubious, they would try to revert to their original concept of the WDA as a picker of winners and a direct player in the economic scene. Above all—this may be an even graver worry—Governments and Government bodies are not very good at picking winners, but they are even worse at trying to save losers.
The hon. Member for Alyn and Deeside (Mr. Jones) and I went through a common experience. He was the leader and I merely gave him what support I could in trying to prevent the closure of the steelmaking plant at Shotton. I find it hard to rid myself of the belief that, equipped with an agency such as the WDA, a Labour Government would be unable to resist demands to save jobs at all costs. Yet the hon. Gentleman and I now know perfectly well that the diversification of the Deeside economy has turned out to be pretty nearly an unmixed blessing for the area.
My worry is that, if a Labour Government were to revert to a more directly interventionist role for the WDA, we would soon have demands to save existing jobs at all costs. I know the pressures on any constituency Member of Parliament to fight like a dog for any job that is threatened in his area. One could not blame a Government who gave in to such pressures, but it would be dangerous. It is important, therefore, that we try to remain on the centre ground of a limited role for the WDA which it carries out admirably. How well it carries it out is shown by the jealousy demonstrated on each and every occasion by English Members of Parliament when they ask why they cannot have an English development agency. That seems to suggest something.
I have good reason to be grateful to the WDA and, in particular, to its chairman. I have not had, certainly not in my present constitutency, problems of dereliction or even problems arising from the massive transition from smokestack industries to modern industries with the consequent mass unemployment. But I have had devastation in the form of the Towyn floods, when I had every possible reason to be grateful to the WDA for the way in which it came in and, together with the Secretary of State, assumed leadership in a community which was badly demoralised by the appalling blow that had befallen it.
Had there been no instruments ready to co-ordinate the renewal of economic activity, it would have taken much longer to get that area back on its feet. In the end, as a result of some well-targeted operations by the WDA, in conjuction with local enterprise, the environment in the Towyn area is noticeably better that it was even before the floods. For that, I am grateful to Dr. Gwyn Jones, the WDA and its officers.
However, I have one query about the operation of the agency. I recognise that it is right that it should operate commercially and seek to maximise its returns. I am a little concerned that it is in some cases increasing the rents at a


substantially higher rate than that of inflation, thereby conceivably placing in danger the future existence of firms that the agency itself helped to create.
The agency and the use that three successive Secretaries of State for Wales have made of it are just about on the right lines. I reject the Thatcherite-Marxist analysis of society—that only economic forces are determinant of conduct. On the contrary, I believe that there is a role for the individual, and that the individual can turn a situation around. The last two Secretaries of State in particular are conspicuous examples of that. I regard Dr. Gwyn Jones as being very much in the same mould.
I am delighted to support tonight this hotly contested Second Reading and I wish well of the agency and of my right hon. Friend the Secretary of State in the use that he makes of it.

Mr. Alan W. Williams: We all strongly support the work of the Welsh Development Agency and generally want it to have more resources and to be ever-more involved in all our areas.
I was asked by the farmers' unions and the prospective parliamentary Labour candidate for Pembroke, Mr. Nick Grainger, to make a few remarks about the problems of abattoirs in rural areas. The abattoir at Withybush has invested £40 million in modernisation and now faces a further £250,000 investment to bring it up to European standards by 5 January 1993. Its problems are shared by more than 50 Welsh abattoirs.
Of the 60 abattoirs in Wales, only four meet European standards. According to the Meat and Livestock Commission, only 27 have modernisation plans, and only 14 of those are remotely likely to execute them. If the abattoirs are not licensed by 1993, they will be compelled to close—and there would be far fewer buyers for farmers. The export of live animals would also increase. Already, one half of Welsh lambs are exported live, and that is an unsatisfactory and cruel trade. I cannot understand why the Welsh Development Agency or the Welsh Office cannot help those abattoirs to modernise. That major problem will indirectly hit farmers' incomes, as well as rural employment. It is difficult to find major employers in rural areas, where abattoirs are an important source of jobs.
Wales would be left exporting raw materials, in terms of live lambs and calves, but it would be much better if the livestock was all slaughtered in Wales, then exported. The creation of value-added industries such as meat processing would also be welcome.
In Mid-Wales the Development Board for Rural Wales has unofficially helped the firm in Llanidloes with its £1 million modernisation programme, but I would like the WDA and the Welsh Office to consider broadening that kind of assistance as a matter of urgency. I know that they are lobbied by many other people, but they cannot sit and do nothing while abattoirs go out of business. That would be bad for the rural economy and rural jobs and for farmers' incomes. Surely the WDA should be allowed to become involved as the DBRW is.
As to the agency's more general work, we in Dyfed would like it to be more involved. My area is on the western fringes of Wales, and from Port Talbot and

Glamorgan westwards, it is difficult to attract major inward investment. The area also needs more factory buildings.
Dyfed has more than 10 per cent. of the population of Wales and more than 10 per cent. of its unemployment, but in terms of factory buildings, only 5 per cent. of the WDA's resources are invested in Dyfed. That prompted complaints by Dyfed county council's industrial development department, which has time and again exerted pressure on the agency to increase its activity in our part of the world.
Amman valley has particular problems. It is a major unemployment black spot, with many rural communities suffering unemployment of more than 20 per cent. It is over 50 per cent. in the village of Garnant. That is as bad as anywhere in south Wales. Dyfed commissioned, in conjunction with the Welsh Development Agency, a report by Coopers and Lybrand Deloitte on unemployment in the Amman and Gwendraeth valleys and what could be done to reduce it. They concluded that there would have to be investment in road links to the M4, particularly to Ammanford and the Amman valley, and an examination of the coal industry.
That matter was commented on by my right hon. Friend the Member for Llanelli (Mr. Davies) and my hon. Friend the Member for Pontypridd (Dr. Howells). The Amman and Gwendraeth valleys have 50 million tonnes of high-quality, low-sulphur anthracite, which has a ready, high-value market. However, we do not want that anthracite to be extracted by opencast mining.

Sir Wyn Roberts: Regional selective assistance is available for mining ventures, if they meet the RSA criteria. My right hon. Friend the Secretary of State announced in September such assistance for Anglesey Mining, with the creation of 147 jobs. As part of the package for small firms that we announced in August, RSA was extended to Pentre colliery for the exploitation of coal reserves. Regional selective assistance is available, provided that the criteria are met.

Mr. Williams: I am pleased to hear those comments, but I had in mind something much broader. My right hon. Friend the Member for Llanelli has frequently said that west Wales would like British Coal to establish a small mines company. As British Coal will not do so, will the WDA consider our 50 million tonnes of anthracite and develop environmentally acceptable ways of exploiting and developing those resources, which would be proactive in that the industry could create jobs for a few thousand people?
The Capel Hendre industrial estate is just two miles from the end of the M4, so it is ideally located for major industrial development. The borough of Dinefwr, which is responsible for Amman valley, is placing great store by developments that could be attracted to that site. I was delighted to see Dinefwr develop last year, in partnership with the Welsh Development Agency, a £3·8 million project. We badly need a major internal investor. The Amman valley has lost nearly 2,000 jobs over the past two or three years, at Abernant and Betws. Those jobs must be replaced, and I hope that Capel Hendre, with 50 per cent. involvement by the WDA, will help to create the employment that the area so desperately needs.

Mr. Peter Hain: I apologise for my absence at the beginning of the debate; I was serving on the Standing Committee considering the Competition and Service (Utilities) Bill.
For all its limitations, some of which have been identified in the debate, the WDA has been a success story —a story begun by the Labour party in 1975, and continued by successive Conservative Secretaries of State since 1979. I pay tribute to those Secretaries of State, who include the current Secretary of State for Wales.
My hon. Friend the Member for Pontypridd (Dr. Howells) referred to rumours of a hidden agenda to dismember the WDA and hive off, at the least, its property sales activities. I hope that those rumours do not prove correct, since such action would be folly indeed. The Scots, for example, are deeply envious of the WDA, and would like a similarly enterprising agency of their own.
In many respects, the agency has, through its success, defied the laws of Thatcherism. It has certainly defied the laws of the No Turning Back group, of which the Under-Secretary of State, the hon. Member for Pembroke (Mr. Bennett), is still a member. As the hon. Member for Delyn (Mr. Raffan), to whose speech I listened with interest, pointed out, the agency has undertaken the public sector pump priming of the Welsh economy that has been so crucial in the 12 bitter years since 1979.
That pump priming has been especially important following the cuts in regional aid that have taken effect over the past few years. No doubt the Minister will recall the reply given to my hon. Friend the Member for Pontypridd by the Secretary of State on Tuesday 26 November about the regional aid cuts in the valleys programme area. Such significant cuts should be properly explained.
Regional development grant, which is especially important to the valley areas, has been cut from £17·2 million in 1988–89 to a derisory £6·9 million. Cuts have also been made in regional selective assistance. The overall cuts in regional aid have been astonishing: it has been cut from £28·9 million in 1988–89 to barely £14·5 million in 1990–91. In just two years, regional aid has been halved, and compensation in the form of regional support elsewhere does not appear to have been provided. The regional enterprise grants introduced two years ago have hardly managed to creep up from a small £0·1 million to a—still small—£0·5 million. I hope that the Minister will explain how he proposes to fill the gap in regional assistance to the valley areas.
Let me now say a little about my constituency, Neath. As I have told the WDA's chairman, Dr. Gwyn Jones, if I have a criticism of the agency, it concerns the lack of inward investment in Neath. There has been plenty elsewhere in south Wales, especially around the M4 corridor, and I pay tribute to the agency for that, but, as the agency has conceded, there has been none recently in Neath. The WDA's property development programme for 1991–92, of which I have a copy, does not mention Neath; it makes no reference to property sales or property development portfolios held by the agency there. I trust that this will be the last year in which Neath is omitted. I know that representations have been made to the WDA, not only by me but by Neath borough council.
My constituency—not just the Neath valley, but the Swansea valley and the part of the Amman valley that falls

within it—desperately needs inward investment. For that reason, I invited Dr. Gwyn Jones to visit the constituency on 11 September. I escorted him around a series of prime industrial sites in Cadoxton, Blaenant, Aberpurgwm and other parts of the Neath valley that are crying out for inward investment, and have traditionally enjoyed the benefits of enterprising industrial activity.
Whatever other areas the WDA chairman may have visited over the past few months, he can have encountered no more exotic venues than those to be found in the Dulais and Neath valleys,—places such as Banwen, Crynant, Resolven and Glynneath. Those areas are very attractive in terms of inward investment, and I hope that, when the chairman considers what his visit has achieved, he will decide to ensure that my constituency receives the investment to which it is entitled.
There is, however, a problem of access to the Neath valley, in particular, because of the missing link on the A465, which has been neglected for more than 15 years. I know that the Secretary of State is aware of that, and I am grateful for the way in which, since the summer—when we discussed the matter—he has hurried through some of the planning issues, and hastened the day when work will begin on building the road up the Neath valley and thus creating an artery that will attract inward investment. The people of Neath very much appreciate the way in which he has cleared away many of the planning obstacles.
Nevertheless, I was disappointed that the Minister of State's announcement yesterday to the Select Committee on Welsh Affairs apparently did not include the A465 missing link in the programme of new roads for Wales in 1992–93. I understand that £195 million is to be spent next year in the programme, and it is worrying that the missing link has not been included.

Sir Wyn Roberts: I am speaking without my notes, but I believe that I said yesterday that we would be involved in the start of work on that section of the A465.

Mr. Hain: If that is so, I am delighted. I hope that the Minister will be able to confirm that; as a Welsh speaker, he will know that the Eisteddfod is coming to Neath in 1994. It will be held just below Glynneath. If the missing link is in place by then, it will make an enormous difference to the event, and to the prosperity of the valley.
The agency's dynamism is also needed in respect of coal production and investment: that is equally important to my constituency. My hon. Friend the Member for Pontypridd made many important points in that regard. I understand that the Welsh Office is now studying a very exciting investment initiative, and I hope that the Minister can give me some assurances about it.
Ryan Mining International has presented an investment proposition. It wishes to establish a new project in the vale of Neath, which will bring at least 600 direct jobs to the area, and many more indirect jobs. The project involves £18 million-worth of investment; it will be environmentally sensitive and very attractive generally. It will hide much of the infrastructure that surrounds mining areas, landscaping it behind environmentally attractive "curtains".
Above all, it will ensure that the heavy lorry traffic that passes through our valleys is taken off the roads and transferred to the railways by reopening the Vale of Neath railway link and taking the coal straight from the Pentreclwydau line—which it is proposed to reopen—


alongside Ryan's existing mines at Rheola, Lyn and Venallt. The coal from that attractive integrated mining project will be taken down the Vale of Neath railway directly to Cardiff docks or conceivably to Aberthaw power station.
Ryans has applied to the Welsh Office for a grant of 80 per cent. of the £6·7 million that it will cost to create the infrastructure. That excludes reopening Pentreclwydau pit, which it will finance. I hope that the Welsh Office will look favourably on its application for £5·3 million, which, I understand, meets all the Welsh Office's criteria.
The Neath valley and the surrounding valleys have some of the finest anthracite in the world. It is clean and has a low sulphur content, and its abstraction would be of enormous benefit not only to my constituents and the local community but the south Wales economy.
I agree with my hon. Friend the Member for Pontypridd that Ryan has shown more imagination and dynamism than British Coal in the past few years. British Coal has seemed almost enthusiastic about closing every south Wales pit, and the last pit in the Neath constituency—Blaenant—closed last July. It is significant that Ryans made a bid to keep the pit open, but, despite the fact that it would get a fat profit from it, British Coal refused. I can only conclude that British Coal does not want competition to show up its traditional inadequacies and failure to provide a future for coal mining, particularly an industry that is environmentallly sensitive and that respects local communities, as the Vale of Neath project will.
Valleys such as Neath—my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) made this point well earlier—need a distinctive strategy. It is not sufficient to treat the south Wales economy as though it were simply the M4 corridor and, welcome though it is, to congregate inward investment around the motorway. The valley areas must not be regarded as commuter areas for new plants and manufacturing companies. Although it is a rather fanciful notion in view of the class base of the valley, I have heard it argued seriously that the valleys could be yuppified and become commuter belts for the M4 corridor.
That is not a serious strategy for the valley communities. The WDA and the Welsh Office must devise a distinctive economic strategy for them. After all, they are attrative areas, yet their traditional skills are wasting away. They are environmentally attractive, particularly for modern high-technology manufacturing investment. Experience in Europe and America shows that such investment often is attracted to rural sites that offer an environmentally sensitive location.
The valleys communities have a history of industrial activity that is waiting to be taken forward into the next century. I hope that the WDA will look at the success of areas such as Baden-Wurttemberg in West Germany, where public sector initiatives and the power of government and public intervention work in partnership with the private sector to provide roads, education, housing and the local environment and all its facilities and the skills and research for technology transfer to achieve the skills base that is necessary to attract manufacturing investment.
The WDA must provide grant aid or allowances to ensure that we keep the Welsh economy to the fore not

only of the British economy but of the new emerging European economy. We need capital allowances to assist with manufacturing investment in the valleys.

Sir Wyn Roberts: I was surprised to hear the hon. Gentleman say, if I understood him properly, that there was no WDA involvement in his constituency. I have a list of 26 WDA investments in Neath, worth £884,000. Furthermore, we are well aware of the Ryan Mining International project.

Mr. Hain: I am glad that the Minister is well aware of Ryan's application, and I hope that he speeds it through the processes of the Welsh Office. The right hon. Gentleman misunderstood me—I do not blame him for that—because I specifically said that there had been no inward investment. I freely acknowledge that there has been plenty of WDA activity, for which I am grateful, but no inward investment from foreign companies such as we have seen elsewhere in south Wales. Moreover, the property development programme does not refer to Neath, despite the fact that it has many ideal sites that the WDA either owns or could develop.

Sir Wyn Roberts: My understanding is that since April 1983, Welsh Development International, which was previously WINvest, has secured eight projects generating £22·64 million worth of investment in the Neath area. But I shall look into it further.

Mr. Hain: I hope that the Minister of State will look into it further. He will find, as the chairman of the WDA conceded, that there has been no major inward investment in recent years, although I acknowledge that it has come in bits and bobs over the years. That issue must be addressed.
Ryan's application is a welcome and exciting attempt to use the potential that still exists for coal extraction in the coal valleys and elsewhere in the valleys, but we are entering into what I would describe as a post-mining culture and need a distinctive economic agenda as we proceed into a new century. The Welsh Office does not show sufficient understanding of the need for that new agenda, but the gap must be filled urgently. I hope that the WDA will consider that and the future of the top of the valleys, which are often neglected and are decaying. They need sensitive investment to ensure that they have a future in their own right and do not simply become commuter belts for elsewhere.

Mr. Alun Michael: This has been a good and constructive debate. It has been one of those rare and valuable debates when several of my hon. Friends and a number of Conservative Members have made positive and thoughtful speeches. I refer particularly to the hon. Members for Clwyd, North-West (Sir A. Meyer), of whom it is characteristic, and for Delyn (Mr. Raffan), who described himself as slightly demob happy today. The one jarring note came from the hon. Member for Cardiff, North (Mr. Jones) who, I regret, was both churlish and smug in his contribution. It was sad to have that approach brought to the debate in that it illustrated the way in which some Conservatives appear increasingly shrill and divisive. All that we heard from the hon. Gentleman was cheap nonsense—he made no positive contribution to the debate. We heard of his experience on parliamentary missions abroad—I must say that if he


believes that two days in Tahiti is equivalent to a coffee break, I hope that that does not say anything the way in which he approaches his working day. His contribution was an exception to the nature and tone of the debate.

Sir Anthony Meyer: I was slightly puzzled by the equivalence between the hotel in Tahiti and the Membury service station. Clearly, there has been a marked rise in the standards at the Membury service station since I was last there. [Laughter.]

Mr. Michael: Clearly, the hon. Gentleman shares the puzzlement of my colleagues about that contribution.
I want to pick up some comments and contributions but, first, I pay tribute to the Labour Members of Parliament and Ministers who made the debate possible. We recognise the value of the Welsh Development Agency and welcome the fact that that is not a point of contention although it must be remembered that it was established by a Labour Government and that the Conservative party opposed it. That experience is repeated elsewhere—it is something of a tradition for the Conservative party to oppose and criticise efforts to encourage enterprise. I had the same experience when I and others—including councillor Paddy Kitson and people such as Arthur Gilbert and David Davies from the private sector—planned the establishment of Cardiff and Vale Enterprise. It has since been a great success and is now supported by the Conservative party and, indeed, by Ministers.

Sir Wyn Roberts: indicated dissent

Mr. Michael: The Minister seeks to cast doubt on that, but I assure him that it was opposed most vigorously by the Conservative party on Cardiff city council, not by Conservatives in the Welsh Office. It was good that, at the end of the day, the Conservatives in Cardiff came to recognise the value of the organisation and to support it.
A little anger is sometimes caused when the Conservatives claim to be the party of business because in recent years it has pursued economic policies that have damaged industry and business. That neglect of economic policies has undermined the manufacturing industry in particular. Above all, it has done enormous damage to small local and family businesses in Wales. There was an example of that yesterday—I refer to the Government's decision not to pursue large businesses that break the law which gave a terrible example of unfairness. Firms which want to obey and observe the law as it has been passed in Parliament are being squeezed and pressed, in order to maintain their market share, to follow those which have less respect for the law. There is also pressure on employees as a result of that.
I set the context against which the WDA undertakes its work by the mention of legality. I must also say that the work of the police and the increasing crime in Wales is a considerable problem for business. There has been an increase of about 22 per cent. in crime in the south Wales police area, and I was absolutely appalled to learn today that the Government's decision to increase policing in some forces includes not one additional policeman in answer to the modest request for 44 by the south Wales police. That is an appalling decision, especially when one increasingly finds—as I am sure my right hon. and hon. Friends do—that business men are concerned about break-ins and problems that must be dealt with in their communities. There has been a scandalous undermining of

the situation, and the decision will not help businesses in Wales any more than it will help the law-abiding communities in every part of Wales.
Against the background of the WDA's work one must consider the Government's failure to ensure that all European money is brought in that is available to help the economy of south Wales. I think the estimate that has been given is of about £100 million in regard to RECHAR. A number of my hon. Friends have commented on that. There is much concern about the fact that Wales is not obtaining assistance from Europe which should be available to it and about the withholding of RECHAR assistance for mining areas and of other forms of assistance.
It is not only the valleys that lose out. We must consider the levels of unemployment in our cities and urban areas. Cardiff, Central's unemployment rate of 15·1 per cent. is the highest of any Welsh constituency. The chairman of the city council's economic development committee—Councillor Jon Jones—has drawn attention to that fact as something which
will he sure to shock people.
It has certainly shocked us to discover that that was the situation, especially when one recognises that the constituency with the second worse unemployment is Cardiff, West with a rate of 13·2 per cent. Cardiff, South and Penarth registers eighth place in the worst in Wales table.
One of the problems with which I hope the Minister will deal in his response is that the work of different agencies —including the WDA, local authorities and everyone else—will be undermined if assistance from Europe is taken away. There is a danger that Cardiff will not he regarded as an area in severe need of assistance—which it certainly is—and that it may miss out when the Commission and the European Parliament undertake their review of current assistance areas. The European regional development fund under Objective II provides funding to areas in industrial decline for improvement to their infrastructure. Traditionally, selected areas of Cardiff have benefited from that scheme and our worry is that the major review of funding announced earlier this year may lead to a redrawing of the map and to assistance to Cardiff being cut in favour of other parts of Europe. For that to happen, when the figures show all too clearly the dire need in central Cardiff for more investment in business and jobs, would be to undermine the situation and would be greatly to the detriment of the work undertaken by the WDA and others.
One must underline the levels of unemployment that have to be tackled in Wales: Swansea, West has an unemployment rate of more than 13 per cent.; Ynys Môn and Rhondda more than 12 per cent; Cynon Valley, Merthyr Tydfil and Rhymney, Torfaen and Newport, West are well over the 11 per cent. mark. Unemployment is still a major problem to be tackled. In recognising the efforts made locally and by the WDA, it would be unwise not to stress the continuing major problems experienced by communities throughout Wales.
Some of my hon. Friends and, indeed, the hon. Member for Delyn referred to the railway system. We desperately need a link to the channel tunnel but, at the moment, we are about to see the ending of the last train from Paddington to south Wales which has particular relevance tonight for my hon. Friend the Member for Cardiff, West (Mr. Morgan). We need a later train up to London from


south Wales, which would encourage the entertainment business and the tourist industry in south Wales. We need a rail link to Cardiff Wales airport, similarly for the benefit of economic development in the whole region. That idea has been pursued with vigour by my hon. Friend the Member for Vale of Glamorgan (Mr. Smith) but it is relevant for the wider region of south Wales. The lack of spending on the infrastructure—especially on rail—when our European competitors who are much closer to the heart of Europe are galloping away from us and making such investment is of great concern.
One of the most important factors for businesses—both new and expanding, whether inward or home grown industries—is the importance of good advice. In that respect, the work of the WDA in conjunction with local agencies is very important. Recently, we have witnessed a massive increase in the number of European grant consultancy firms who suggest that significant grants are available from the European Commission. Usually for a fixed fee of several hundred pounds, the consultancy undertakes to find grants for which a business is eligible and a money-back guarantee is often offered. The information often provided by some of the firms is generally available free of charge from a number of official organisations, including the EC office in Wales, the Welsh Office exports branch, larger enterprise agencies, the Wales Euro Information Centre and the European Business Centre in Cardiff as well as through the advisory work of the WDA. It is not uncommon or unreasonable to charge for research services undertaken on a client's behalf, but the businesses concerned often develop unrealistic expectations of their chances of obtaining grant aid and can be disappointed by their subsequent failure to obtain grant moneys. I have been told of one company, now in liquidation I believe, which, not only provided irrelevant information, but defaulted on repaying the initial fee charged, despite offering a money-back, no-risk guarantee.
That is a worrying activity. The question of such consultancies has been raised in the European Parliament in Strasbourg by the Member of the European Parliament for south Wales, Mr. Wayne David. I ask the Minister of State to note the concern, and to agree that what is needed is a partnership between bodies such as the Welsh Office and the WDA, and local authorities and local enterprise agencies, to provide a one-stop shop which would make such advice available. Then people could be certain that they were getting neutral, objective advice, and being told the hard truth as well as the encouraging possibilities. There should be a partnership among bodies with expertise in Wales to provide such information. This is not an area in which the opening up of competition is helpful.
We must consider the work of local authorities in Wales. I was rather sad that although the Secretary of State gave credit to the Welsh work force—and then to himself and to the WDA—he failed to put the local authorities at the top of his list of bodies deserving considerable credit for success in finding inward investment. Bosch, Japanese investment, and organisations such as the Chemical Bank, British Airways and a number of others have come to south Wales because of the hard work of local authorities, which often takes place behind the scenes and is in partnership with the WDA and the Government.
The Minister will note that I mention the Welsh Office specifically. It would come better from Ministers to speak of the achievements of the Welsh Office and the WDA if they gave the same credit to the local authorities in south Wales that those authorities give to the help that they receive from bodies such as the WDA. I hope that the Minister will respond generously on that subject.
Credit should also be given to the Wales TUC. As I said in an intervention, I was sad at some of the comments made earlier about that body. Like local authorities, the Wales TUC has recognised that the real key to success in that area is partnership, and every report from organisations such as Cardiff and Vale Enterprise, of which I remain a director, gives credit to the co-operation of the WDA and refers, often in fulsome terms, to Welsh Office money or money from the European Commission. Local authorities, enterprise agencies and others work, too, with bodies established by the Government in Wales, including even the development corporation. I underline the role of the local authorities, for example, in the redevelopment of central Cardiff, where partnership with the private sector was so important.
We must recognise the initiatives that can be taken by local organisations. Against that background we need to consider the way in which the WDA should be working to strengthen the Welsh economy. There has been much discussion recently of procedures and processes, and there has been criticism of the way in which the WDA has done certain things. Those matters should be investigated and the systems must be put straight. The people at the head of the WDA must recognise that they are not operating in a private company. Public money is involved, so the standards of care and accountability required in public life must be observed at every stage. We also need stability within the WDA. There is some concern that the many changes in recent years may have led to an element of instability in decision making.
Those are serious points, but it is also important that we do not weaken the agency's credibility both inside and outside Wales. The best way to strengthen that is for the agency to be open to criticism, ready to put its house in order and to discuss the way forward with everyone else concerned. Monitoring techniques in job creation have always been difficult. Monitoring is not easy and needs care. We worked very hard on deciding which method to use in Cardiff and Vale Enterprise, and came to the conclusion that we should always attribute the minimum to the work of the agency and credit the maximum to other agencies involved in any partnership work. That gives credibility and authority to the figures released. I suppose that I am recommending what might be described as a conservative estimate—although nowadays it would be odd to use that expression, because modesty does not appear to be part of the job description for Secretaries of State in this Administration.
Part of the problem was caused by pressure from the Secretary of State's predecessor and others for high figures that could be trumpeted in presenting the achievements of the WDA. What is needed is a more sober and reasonable assessment of what is being achieved and targeted.
In recent pronouncements we have heard described four objectives of the WDA. The first is to attract new inward investment. That is all right but, to expand on the idea, we need to target that inward investment and to take a realistic look at the potential of different forms of inward


investment for building the economy rather than simply considering the raw numbers of jobs created in the first days following the investment.
The objective is to work with existing businesses in Wales to promote economic development. I hope that that would include working with such businesses to help them expand and to encourage their activities, not simply seeking to involve them in the economic development of the area. More must be done to help our own indigenous businesses.
The third objective was to generate environmental improvements by land reclamation, and the fourth was to promote economic development in rural and urban areas. The debate shows that there are many good ideas around, and many positive contributions that could be made if the partnership and decision making is taken to a local level.
I pay tribute to the speeches of my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who has ministerial experience in such matters, my hon. Friend the Member for Neath (Mr. Hain), who brings a fresh approach to the problems of his valley, and my right hon. Friend the Member for Llanelli (Mr. Davies), who made a cogent contribution early in the debate. Each of them described the creativity in their communities in the valleys, which could be harnessed to develop the local economies. They were examining real needs, as was my hon. Friend the Member for Carmarthen (Mr. Williams), who spoke of the importance of abattoirs to the rural economy. My first experience in local authority was to be put on the abattoir committee in Cardiff in 1973. I do not envy anybody who has to tackle that activity, whether at the practical or at the economic level. My hon. Friend is right to stress its importance and I hope that we shall have a positive response from the Minister.
I hope that the WDA will listen to my hon. Friends' points and will accept that there is a need to be adventurous and imaginative, while also being rooted in the communities for which my colleagues have spoken.
I especially enjoyed the thought-provoking and imaginative speech by my hon. Friend the Member for Pontypridd (Dr. Howells). The Minister may agree that my hon. Friend showed an ability to think laterally, which is what we need to tackle the enormous problems that we face in Wales. He was very much to the point in his comments on training funds. I am not sure that I agree with him on the idea of hiving off the land and property of the WDA. There is much to be said for a one-stop shop in these matters and there is much to be said for the body that is responsible for job creation looking at the various job creation factors in relation to property and to the development of land rather than looking at matters only from the point of view of letting. The criticism might be that the WDA has been pushed too far by Government policy into looking too commercially at its lettings rather than looking at developing the job creation potential in its decision making. We come together on the target and the argument needs to be pursued in considering how we develop the work of the WDA.
We need to consider a number of points about inward investment. The figures to which I referred have caused problems because recent audit reports suggest that the WDA claims a high proportion of inward investment, and that it includes moves from England and expansion in plants that were once inward investment. There is a need to examine objectively the validity of the figures, not as

matters of debate or point scoring, but to enable us to be precise about the facts with which we are dealing in our debates.
We keep hearing that there is a big push on at the Welsh Office to create links with the European motor regions, such as Baden-Wüurttemberg, Cataluña, Rhône-Alpes and Lombardy, to which several hon. Members have referred. We need more information about the pay-back so far and about the quantifiable measures that will judge the success of those policies. We are not talking about a background of specific objectives. I remind the Minister that the contacts with the motor regions build very much on links forged by south Wales local authorities over many years. The investment in time by local authorities, especially in the case of Baden-Würrttemberg, has made it possible to look at the policy from the Welsh Office point of view.
The opening of a European office is to be welcomed, although we need to know about the mechanisms for disseminating the benefits back in Wales. How will that relate to the European activities of other organisations, such as the local authorities that make use of European funds?
I draw the attention of the House to the fact that, by 1988, 75 per cent. of Japan's overseas investment was in non-manufacturing activities. What is being done to attract that market to Wales? What analysis is the WDA making of the potential there? Targeting is an important part of the question. I suggest that it is not just a numbers game of how many jobs can be attracted. We need to look at the areas of real potential because there is a danger of missing opportunities.
One example is the supply of parts and materials to incoming industries. We should consider the mistakes made in the United States and elsewhere. The Minister may be aware that in America imports, accounting for almost 30 per cent. of the United States car market, along with cars produced by United States based transplants, have swallowed more than half the American car market. The United States autoparts trade deficit with Japan is heading up to $12 billion from $3 billion five years ago. According to one study, it would hit $22 billion by 1994. That is relevant to Wales. In some cases, our indigenous industries find difficulty in getting a fair share of supplying the industries that have come in. That is important with the industries that have come in with the declared policy of encouraging local suppliers. Bosch and some of the Japanese industries have come in with that stated aim.
The problem that has been experienced in America is that, over time, those doors close. The opportunity may be there for a period, but it needs to be seized. If it is not seized, it may disappear. A University of Michigan study of the supplying of one Honda transplant found that 38 per cent. of the components had been manufactured in Japan, 46 per cent. by Japanese transplant suppliers and 16 per cent. by United States suppliers. The Americans are protesting about that.
It would be silly to moan and blame Japanese companies or the incoming Bosch firms. We need partnerships to be formed in Wales and for the WDA to work positively to help our own companies, and to help the creation of home-grown industries where necessary, in order to seize the opportunity. That must be done with a positive approach. It will not just happen accidentally, and it should not be taken for granted. We need to concentrate on supply and secondary manufacture in partnership in that way. One of my worries is that there seems to be a


broad-brush approach from the WDA about its intentions and hopes. We need to see some of those things brought down to very specific intentions which are agreed and developed in partnership, and very specifically, with local authorities, enterprise agencies and others.
Another point is the need for the WDA to respond to change. The problems of the recession have perhaps not been met sufficiently. There was a little bit of an exchange about advance factories. Some Conservative Members were dismissive of the contribution that was made. However, is it right that the WDA should still concentrate on building bespoke factories? I understand the argument that advance factories frighten off the private sector, but the private sector is not building at the moment, certainly in many areas of Wales. Is not this just the time when the WDA should be flexible enough to step up advance factory programmes, in a property slump, and enable Wales to be prepared and ready to take whatever opportunities are available?
The Secretary of State made a passing mention of indigenous companies. That is where I want to concentrate the emphasis. We have seen in Wales over the years a loss of headquarters companies. We have seen the importance of headquarters companies which are in Wales. In particular, I pay tribute to ASW—Allied Steel and Wire —in my constituency. It is an excellent company which works with the community, not to advertise itself or ingratiate itself but because it sees itself as an integral part of that community. It sees itself as a part not only of the business community but of the whole community in Cardiff, and indeed of a wider area of south Wales. Its approach to the recession was shown by the way in which the chairman and top management took a cut as they saw the recession coming on. That showed the way in which they wanted to make sure that the business prospered and was able to cope with the recession. That is in contrast, for instance, with organisations such as Welsh Water, which did not approach the onset of the recession in the same way.
There is a need for concentration on our indigenous companies. There is a need for the WDA to move decision making to a more local level so that partnerships with local authorities, private companies, chambers of commerce and so on can be made more fruitful and effective. We hear too much about the headquarters and international aspects of the WDA and not enough about the local work of the WDA, which, of course, is the aspect on which virtually every one of my hon. Friends concentrated.
The next point is the importance of training and enterprise education. Even supporters of the idea of establishing TECs feel that they are not moving quickly enough. We recognised the problem that they faced immediately they were established—that is, immediate cuts in their finances—but we need skills, we need the skills audit to be developed, and we need a partnership between different aspects of government, local and national, to tackle that serious difficulty. We need also to support start-ups. That matter has gone off the agenda in recent times, although many of us have spent much time on it and the Minister of State's predecessor took a leading role in some of the discussions about seven or eight years ago. We need to remind ourselves of the importance of this matter

and the significant contribution that it has made to creating new jobs in Wales in recent years. That is something that can happen only at a local level.
I have something of a reservation about the report "Skills and Enterprise: An Agenda for Wales" that was published the other day. It seems to suggest a worrying transfer of influence, which could turn into a power, to the WDA. That is all the more worrying when local authorities are sometimes unwilling to take a stand on justifiable issues because they fear that, if they stand up to the WDA on one issue, that might jeopardise their joint working on another venture. To see the WDA extending its influence into training makes one feel that it is tending to become a mini Welsh Office. Perhaps the Minister of State should look out for his job if the WDA further extends its role.
That report makes scant mention of the role of the local authorities, which still have a big part to play in training, and which will have a residual role even if the Government go ahead with their crazy idea of removing colleges from local authority control. Local voluntary organisations, such as the Women Workshop, compacts and in-house company training provide training opportunities in various parts of Wales.
The report also leaves one with little confidence that anything other than lip service is being paid to the needs of unemployed and disadvantaged people. That matter should have been one of the major headings rather than the subject of passing references on, I believe, page 13 and in the appendix.
Not enough is being done at the moment to provide employment and training for adults with learning difficulties. I have been involved with the work of the computer workshop in Colleg Glan Hafren where we have seen the way in which a real contribution to employment can be made if proper training and opportunities are offered.
I pay tribute to South Glamorgan county council for recognising the need to establish training places to enable people to work on from their placement to a real job from which, in the longer term, they can find permanent employment with the local authority. We need such a means of moving people from a placement into full employment. I recognise that that is not an easy thing to manage and it needs considerably greater encouragement than it is given at the moment.
I was sad to find that one organisation which deals with adults with learning difficulties in my constituency had been left high and dry by the company that was its contracted trainer. Although there was no longer any contract to provide training, the managers and the trainees at Track 2000 in Splott continue to attend voluntarily—the trainees do not receive their training allowance—and the social services are still referring adults with learning difficulties to that organisation although it had fallen off the agenda locally.
I ask the Minister of State to take note of that example and to find the best possible way of ensuring that, in the present economic difficulties, people with disabilities of all descriptions do not get lost once again, as has happened all too often in the past. We must remind ourselves of the importance of creating a training opportunity for people with disabilities. That is why I ask the Minister of State, in his response, to agree that he will look specifically at that point——

Mr. Deputy Speaker (Mr. Harold Walker): As the House knows, debates can range widely on Second Reading, but the hon. Gentleman is going very wide of the purpose of the Bill.

Mr. Michael: I take your admonition, Mr. Deputy Speaker. I referred to those points because the document that was published this week referred to an increased training role for the Welsh Development Agency, especially in relation to those aspects of training.
It is important that training is developed in partnership and that the WDA recognises the role of other bodies and does not take on too strong a role for itself in developing employment training initiatives.
The WDA recently stated that over 400 of the factory units that it owns in Wales are currently unoccupied. While that is undoubtedly a sign of the depth of the recession in Wales, the Government should ensure that every effort is made by the agency to let those properties and get people into work.
The work of the WDA cannot be viewed in isolation from the general economic climate and the way in which it affects the Welsh economy. In the past year, unemployment in Wales has risen by more than 37 per cent. Business failures have risen by almost 90 per cent. Average earnings in Wales are lower than in any other region of Britain, with 40 per cent. of adult full-time employees earning less than £2 per hour.
A Labour Government would work with the WDA to create a climate which would enable business to prosper in Wales. We shall give serious consideration to making available new sources of investment and finance for growing Welsh firms. As my hon. Friend the Member for Alyn and Deeside (Mr. Jones) said, we must tackle the skills shortages that prevent many Welsh companies from expanding. In consultation with the WDA and higher education institutions, we shall investigate the establishment of Welsh technology trusts to work with small businesses to improve the quality of technology transfer and access to it.
Growth, common sense and, above all, partnership are the qualities that a Labour Government will bring to Wales and to the work of the WDA in Wales and for Wales. Business in Wales, like the people of Wales, needs that day to come quickly.

The Minister of State, Welsh Office (Sir Wyn Roberts): We have had a thoughtful and therefore helpful debate. Seldom have I found myself more in sympathy, if not in agreement, with the views expressed by Opposition Members, especially when it seemed that they were edging towards coal privatisation. Perhaps the prospect of an election concentrates the minds of hon. Gentlemen. However, I must not be too provocative. It is abundantly clear from what has been said that there is widespread approval for the work of the Welsh Development Agency and for giving it adequate resources to carry out its task.
The WDA has played a full and vigorous part in transforming the outlook for the Welsh economy, but, of course, much remains to be done. Through its wide range of services, including the provision of modern industrial floor space, the supply of financial and technological advice and the attraction of inward investment, the WDA has done much to help bring about the transformation that we have witnessed in Wales. But the agency is not standing

still. Increasingly, its emphasis is on becoming a catalyst, a facilitator and a pump primer to stimulate private sector enterprise and investment.
The hon. Member for Alyn and Deeside (Mr. Jones) referred to the Welsh Development Agency Act 1975 and the origins of the agency. In an intervention, I mentioned the change that we wrought on that body in 1980. The Government have indeed given the WDA an expanding role and a new dynamism. I am sure that my hon. Friend the Member for Clwyd, Noth-West (Sir A. Meyer) and others would like to be reminded of some of the facts. The current budget of £160 million is an all-time high in both cash and real terms. As we heard from my right hon. Friend the Secretary of State, next year's budget will be even higher, at £166·75 million. We are spending more in cash terms on the WDA in one year than was spent during the whole of its time under Labour between 1976 and 1979. We have spent more on factories than the Labour party did. We are spending more on clearing derelict land. The average allocation under this Government for land reclamation is 30 per cent. higher than under the previous Labour Administration.

Mr. Rowlands: I am sure that the Minister will deal with the facts of the budget in a moment, but I wish to ask a specific question. The figure of £166 million was announced in the autumn statement. What is the net contribution of the Welsh Office to the £166 million for next year?

Sir Wyn Roberts: It is about £76 million. I shall come to the hon. Gentleman's point in a moment.
One of the first things that we did when we took office was to introduce the Industry act 1980, in which we gave the WDA the more catalytic role of stimulating private sector investment by encouraging private sector ownership of factories. That was important, because it was the only real way to achieve sustained high growth and prosperity. The attraction is that it gives the companies a real stake in Wales. The agency has succeeded in bringing more private money into Wales. For example, last year, for every pound that it spent on joint property ventures, it was successful in attracting more than £4 of private investment.
The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) rightly referred to our Command Paper 1516 on Government expenditure in Wales. I draw his attention to paragraph 5.21:
Net grant in aid will decline significantly over the 3 years (from £87 million to £62 million), with the balance being made up from increased receipts.
I give him an assurance that, in setting sales targets, we take into account economic factors and the state of the property market in the year in question.

Mr. Rowlands: Is that all?

Sir Wyn Roberts: There is more that I could say, but I can certainly go no further in substance.

Mr. Rowlands: I am only teasing the right hon. Gentleman. We are trying to check the plausibility of that investment. That Command Paper assumed that the 1991 forecast of the factory sales would be 74,000 sq ft. Originally it was intended to be 209,000. We should have an idea what that figure is now likely to be. The figure for next year is 260,000. In terms of factory sales, how feasible are those figures?

Sir Wyn Roberts: My right hon. Friend the Secretary of State has made an announcement. I have told the hon. Gentleman the proportion by way of net Government contribution. We anticipate that we can achieve the rest of the difference between net grant in aid and the gross. We shall make up the balance with increased receipts.

Mr. Rowlands: What will happen if that does not happen?

Sir Wyn Roberts: As my right hon. Friend the Secretary of State said, I can only refer to our record, which, in terms of expenditure by the WDA, has been very good indeed.
In 1983, we set up WINvest, now Welsh Development International, to provide a sharper focus for the drive to get more overseas companies to choose Wales as a base. To date, we have had remarkable results. Last year, 147 projects were won, which will generate about £585 million of capital investment and are projected to create or safeguard about 15,000 jobs. We have also provided for the increased presence of the WDA abroad. Offices have now been opened in Canada, Taiwan and Korea, and an office in Germany is planned for next year. Offices were already placed in the United States and Japan before 1979.
Until the hon. Member for Cardiff, South and Penarth (Mr. Michael) spoke, it seemed that Opposition Members wanted to extend the range of the WDA's responsibilities still further, especially in training. Hon. Members will know that a transfer of the responsibility for training in Wales has been approved by my right hon. Friend the Prime Minister. From 1 April 1992, it will rest with the Welsh Office and not the Department of Employment.
The assumption of responsibility for training gives us a great opportunity to capitalise on what we have achieved to date with the establishment of TECs, in economic development and in our education reforms. Training will sit alongside enterprise and education in the Welsh Office. My right hon. Friend has set up a special unit at senior level to co-ordinate policies and activities across Wales. As a first step, he has issued strategic guidance to the TECs, setting an agenda for Wales within the national priority areas. Naturally, inward investment features prominently in that strategy.
In addition, if the Further and Higher Education Bill becomes law, we shall have further and higher education funding councils for Wales. Again, that will be the direct responsibility of the Welsh Office. Therefore, the whole of education and training at almost all levels will be beneath the umbrella of the Secretary of State at the Welsh Office.
Much earlier, the National Audit Office report was referred to. I wish to clarify a point about grants. The main form of grant, regional selective assistance, is indeed paid in relation to the number of jobs created, but it is important to realise that these grants are normally paid in stages over a period of time as projects develop. Naturally, a company's plans sometimes change, and the number of jobs originally foreseen at the time of the company's announcement changes. Sometimes job numbers increase but, it is true, sometimes they fall. If they fall, the amount of grant payable can also be reduced. There is also provision for grant to be recovered in certain circumstances if the project does not proceed as anticipated.
The WDA is active in urban development. It is vital to reinforce and strengthen local economies, particularly in the urban areas of Wales, which may have suffered as a

result of the rundown of traditional industry. The WDA recognises that, and has set itself the job of bringing about urban regeneration and development to create an attractive environment for working and living. The involvement of the private sector is desirable in all that. The agency's role is essentially to act as a catalyst and co-ordinator.
My right hon. Friend referred to the general policy and the priority now attached to this work. Resources are being focused and targeted on specific towns or areas where there is both need and the potential for improvement. Under that programme in 1991–92, the agency plans to spend a record £12 million in some 28 towns or areas throughout Wales.
The agency cannot act alone, and partnerships or joint ventures with both the private and public sectors are often formed to take projects forward. I should like to mention some specific examples. The problems of Holyhead are well known, particularly to the hon. Member for Ynys Mon (Mr. Jones) and me. The solution requires a combined, co-ordinated and targeted effort. The WDA has been joined by Ynys Mon borough council, Gwynedd county council, Sealink Stena, Holyhead opportunities trust and Holyhead town council to form the Holyhead urban joint venture. Some £5·6 million has been announced to regenerate the town. That involves the relocation of the port operations, the redevelopment of the west dock to provide major tourist attractions; developing land and the provision of premises for industrial investment. It also involves a marina, general environmental improvements and pedestrianisation works. There will also be a housing renewal area.
I should also like to mention the Cynon valley, where the borough council—again, a local authority—and the WDA have joined in a major plan to revive the valley's environment, prosperity and prospects. The plan, which will involve substantial private sector resources, will involve expenditure totalling some £18 million over the next few years. There will be substantial development of land for industrial purposes and major infrastructure work, including highway improvements. The town centres of Aberdare and Mountain Ash will also be the subject of a programme of commercial improvements. Major environmental and land reclamation works are also scheduled, which is particularly important for sites such as that occupied by the former phurnacite plant.
However, the plan cannot be achieved by physical works alone, and the improvement of training facilities is also included, along with substantial marketing campaigns, to attract new investment. I look forward to seeing the plan developing on the ground.
Further west, in Llanelli, the WDA is also involved in major proposals to regenerate the south Llanelli coastal area. The agency plans to invest over £1·6 million on residential and business park sites, a new coastal link road, coastal protection works and improved landscaping. Towns such as Merthyr Tydfil, Milford Haven and Rhyl are also to receive substantial investment through joint ventures, and 18 other towns are earmarked for urban investment.
Reference to Merthyr prompts me to inform the hon. Member for Merthyr Tydfil and Rhymney, in connection with local sourcing, that the WDA is well aware of the potential for local Welsh firms to supply large inward investors. The WDA and the Welsh Office have programmes to ensure that investors are aware of


opportunities for local supply. An example of that is our "Source Wales" campaign, which is operated by the Welsh Office.
In its rural development activities, the agency has been responsible for creating a wide range of job opportunities in rural Wales and has played a key role in strengthening local communities. At the beginning of last year, the WDA launched its rural prosperity programme. As a result, 15 rural communities will benefit from a co-ordinated programme of action totalling over £5 million. Throughout the Principality, rural towns and communities will benefit.
For example, in Gwynedd, action plans have been prepared for five communities, including Llanrwst, Porthmadog, and Bethesda in my constituency. In Clwyd, places such as Corwen and Denbigh have been targeted. In Dyfed, a programme of improvement works will be implemented in five areas, including Llandovery, Fishguard, and Narberth. The programme will implement a range of new opportunities in the communities concerned to enhance job prospects and local facilities.
I am a great believer in this initiative. The process involves collaboration between the local community, the voluntary sector, the private sector and the public sector, the objective being to harness the skills and enthusiasm of the community with the resources of the public and private sector to bring a new vitality and viability to the communities concerned.
That method is proving effective, due to the willingness of everyone to work together. I am impressed by it. I saw the partnership efforts at first hand when I visited Narberth not long ago. That is the way forward in the rural areas, and I am delighted to say that the agency will be considering other areas for action under the programme.
The Government are fully committed to the work of the agency in rural areas. That is one reason why we have given it record resources this year, which has in turn enabled the agency to increase by £5 million its expenditure in rural areas this year. In total, it is investing £25 million in this financial year, in support of development in rural areas, representing a substantial and growing commitment by the agency.

Mr. Alan W. Williams: On rural areas, the hon. Member for Brecon and Radnor (Mr. Livsey) and I referred to the problem of abattoirs. Why is it that the Development Board for Rural Wales can help the project in Llanidloes, but the Welsh Office cannot become involved in the widespread problem in the rest of Wales?

Sir Wyn Roberts: The hon. Gentlemen are right to say that the Development Board for Rural Wales can make grants for abattoirs. Grants are also available outside the board's area. The real problem is that the establishment of a new slaughterhouse cannot be assisted if it adds to the slaughtering capacity in an area. The building of a new slaughterhouse must not create over-capacity—in other words, it must be a replacement of an old slaughterhouse. I have cut my answer rather short, but I am willing to write to the hon. Gentleman giving further details.
I thank my hon. Friend the Member for Cardiff, North (Mr. Jones) for paying a personal tribute to me on my involvement with Europe. There are great opportunities for Wales, Welsh business and the WDA in Europe. My right hon. Friend the Secretary of State mentioned that we

have been working actively in recent years to develop closer links between Wales and other regions in Europe. We have enjoyed a great deal of success, which the WDA has followed up effectively. We have signed formal partnership agreements with Baden-Wurttemberg in Germany and Catalonia in Spain. We are also working actively with the Lombardy region in Italy and I have signed a letter of intent with a view to an agreement with the president of Lombardy, Dr. Giovenzana. We also have a relationship with the Rhone-Alpes region of France.
Those four motor regions of Europe have among the most powerful economies in the Community. They have considerable populations of some 5 million to 10 million people—6 million in Catalonia—so they have considerably larger populations than Wales. Nevertheless, although our relationships are good and primarily business-based, they extend more widely, particularly in the academic sphere. We lay great emphasis on technology transfer, and I believe that, by putting ourselves alongside those advanced regions of Europe, Wales can only benefit. We also have cultural contacts with those regions.
I am convinced that we must avoid the trap of regarding Europe simply as an abstract concept. It is a real place and a real market, full of opportunity for Welsh business. Europe must be approached in a positive and practical way, not simply with rhetoric.
The purpose of our regional relationships is to form the framework at political and administrative level that will help and encourage our companies and institutions to make practical, collaborative projects and explore business opportunities in each other's territory. It makes sense for Wales to approach this question region to region. We have been very encouraged by the results so far. I have visited Stuttgart, Milan and, most recently, Barcelona to pursue those opportunities. I am in no doubt that such opportunities exist and that there is a good welcome for an energetic approach by Wales within Europe.
I also believe that the partnerships that we are now establishing will be of lasting benefit to Wales within the Community.
It is also becoming increasingly clear that others, outside Wales, are of the same opinion. Wales is admired for the way in which it has pursued industrial recovery and environmental improvement, while at the same time attracting international investment and fostering the growth of indigenous small companies. We are also admired for the way that we are now looking outward, on a regional basis, to opportunities throughout Europe and the world. In many ways, it seems to me that ours is a model for regional development. President Pujol of Catalunña is of the same opinion. Others, in both western and eastern parts of Europe, are now interested in learning from our experiences. The WDA, as my right hon. Friend has said, has a most important role to play in all these sectors.
The House has heard today, from my right hon. Friend, myself and others, a story of growing success, and true co-operation in Wales. I know that some may seek for their own reasons to paint a picture of gloom and doom, and to undermine those who are working for Wales with energy and optimism, but they are the minority, and they have not been sounding off too much today. Clearly, we in Wales are moving forward; business confidence is reviving.
Unemployment in Wales fell last month. Since 1986, long-term unemployment has fallen from 78,000 to 31,200—a reduction of 60 per cent. That is 8 per cent. more


than the fall for the United Kingdom as a whole during the same period. There are now nearly 100,000 more people in employment in Wales than there were before the 1983 general election. We want quality jobs, and we want to raise the level of remuneration.
Our success in attracting inward investment is well known, but I make no apologies for returning to the theme: Wales does extraordinarily well for its size in the battle—and battle it is—for foreign investment. I must tell the House that these projects do not arrive of their own accord, on a plate, gift-wrapped. Wales has no God-given right to them.
Competition is increasingly fierce. I agree with those who say that it might become fiercer, especially among the EC's 80 or so development regions, yet in 1990, with 5 per cent. of the United Kingdom population, Wales generated 20 per cent. of all incoming foreign investment projects. With 0·8 per cent. of the EC population, Wales achieved 5 per cent. of the investment. Wales chalks up another overseas investment project roughly every three working days—and that does not include business from the country's biggest source of investment, the rest of the United Kingdom.
All this means more jobs for Wales. We are all agreed that we want skilled and good quality jobs. Welsh Development International is charged with the task of continuing to generate such jobs. It has already sown the seeds, for example, with the joint venture between Imperial college, the agency and Newport borough council. Imperial park is set to become one of the leading science parks in the United Kingdom, combining the advantages of a superb site in Wales with the strength of one of the world's leading research institutions.
In addition to the creation of quality jobs, we are creating a better environment for living and working—Wales a "land of quality" as our own logo has it. The success of the WDA's land reclamation scheme is also the

envy of many. Today, derelict land is being reclaimed in Wales at the rate of a football pitch a day and at the lowest cost among comparable programmes in the United Kingdom. Last year alone, projects worth £175 million were located on reclaimed land.
This year's budget, at £27 million—10 per cent. more than last year and more than double that of five years ago—will allow more than 1,800 acres of derelict land to be reclaimed. Reclaimed land has provided sites for enterprise zones, the Swansea and Penarth marinas, and for housing, factories and amenity or leisure sites such as the national garden festival site at Ebbw Vale. Nearly £20 million has already been spent on the reclamation of the old colliery and steel works site at Ebbw Vale. More than 1,000 jobs will be created when the festival is in progress.
There is much to be proud of, and the WDA has played a key part in the success so far. Looking forward, the new financial unit will provide the WDA with the headroom that it needs to pursue its tasks in the years ahead. I urge the House to support the Bill.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House—[Mr. Boswell.]

Further proceedings postponed, pursuant to Order [22 November].

WELSH DEVELOPMENT AGENCY BILL [Money]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act resulting from the Welsh Development Agency Bill, it is expedient to authorize—

(a) any increase in the sums payable out of money provided by Parliament or out of the National Loans Fund or charged on and issued out of the Consolidated Fund; and
(b) any increase in the sums payable into either of those Funds,

which is attributable to increasing the limit in section 18(3) of the Welsh Development Agency Act 1975 from £700 million to £950 million. —[Mr. Boswell.]

Welsh Development Agency Bill

Bill immediately considered in Committee, pursuant to Order [22 November].

Clause 1

INCREASE OF FINANCIAL LIMIT

Question proposed, That the clause stand part of the Bill.

Mr. Rhodri Morgan: I am grateful for the opportunity briefly to mention some reasons why we should carefully consider clause 1, which increases the borrowing limit for public finance for the WDA from £700 million to £950 million. I approve of that increase. The WDA has earned it, but it should not have a carte blanche. I have been concerned by one or two aspects of the way in which the WDA has been spending money recently.
The WDA should receive this extra money, but that does not mean that it should be immune from criticism or parliamentary scrutiny of how it is spending this money. That is why I reject the criticism of me by the hon. Member for Clwyd, North-West (Sir A. Meyer) for certain things that I have said recently. He said that my criticisms of the agency were damaging to Wales. That would be true only if one believed that any criticism of the WDA was damaging to Wales and that we as Members of Parliament did not have the right to scrutinise the way in which the WDA is spending its money.
If we come across examples of the WDA misspending public money, it is the oldest public duty of all to draw attention to it, particularly when we are being asked to approve a massive increase of £250 million in the public funding available to the WDA. We should specify the acceptable and unacceptable ways of spending that public money.
I want to give two examples of what I consider to be unacceptable methods of spending public money. I am talking of only a small aspect of the agency's operation, which I believe is open to perfectly fair criticism. That is not a criticism of the agency's being at all. If it were, it would be like saying that Beethoven's Emperor concerto is a rotten piece of music because he was drunk when he wrote it. That makes a difference to what we think of his music, and the same applies to my criticism of the agency.
In 1990–91, the agency pointlessly lost around £1 million on its north American operations as a result of naivety and bad management. I am informed that it lost $250,000 on just one weekend—the same weekend, I believe, that the Secretary of State was there—in June this year.
In July 1989, the agency entered into a bizarre three-way arrangement to set up Welsh Development International Inc. as a profit-making company incorporated in the state of Maryland. It was wholly owned not by the WDA itself, or WDI, but by Mr. and Mrs. Raymond Carignan of Baltimore, Maryland. Mr. Carignan was the chief operating officer of the agency's north American operations. He owned 99 shares of the company and his wife owned one share, in the usual way. That is a bizarre way for the agency to do business. The dangers to which it exposed the agency became evident at the end of June and the beginning of July this year.
I wrote to the Secretary of State about that matter on 13 September, and on 30 September I received a reply that was nothing more than a cover-up. I think that the right hon. Gentleman had been flannelled by the agency.
The $250,000 was lost when Mr. Carignan stripped the office bare of all its expensive equipment—an entire desktop publishing system, audio visual equipment, the database, desks, telephones, security system, and so on. Everything was stripped from the office after it had been in operation for 23 months. I am told that that equipment was valued at $250,000, but the WDA's contract with Mr. and Mrs. Carignan's private company had been so badly and naively drawn up that the agency had no claim to the items that the British taxpayer had paid for to equip the WDA's North American operation. Under the contract between the WDA at Pearl house in Cardiff, WDI and Mr. and Mrs. Carignan, they had the rights to all that equipment.

The Minister of State, Welsh Office (Sir Wyn Roberts): The agency's accounts are subject to audit by the National Audit Office, for which I am sure the hon. Gentleman has great respect. If he is alleging impropriety of any kind within the WDA, would it not be better if he reported any such facts or allegations that he has to the proper authorities?

Mr. Morgan: There is no need for the Minister to come the old soldier with me. I wrote to the Secretary of State on 13 September, within a couple of weeks of being supplied with documents covering the contract. The right hon. Gentleman is, after all, the person who appoints the chairman of the Welsh Development Agency—who is responsible to the Secretary of State for Wales. To pretend that the right hon. Gentleman has no responsibility for ensuring that the WDA's money is spent properly is an extraordinary alleged abdication of the Welsh Office's financial responsibilities.
The Minister will be aware that the Secretary of State's primary responsibility is to the House, which is why we are debating the clause. The second responsibility is that of the permanent secretary—as the chief civil servant of the Welsh Office—to the Select Committee on Welsh Affairs, or to the Public Accounts Committee. The third responsibility is obviously that of the National Audit Office, which serves as a safety net in case the Secretary of State has, for one reason or another, not found out.
On 13 September, I wrote to the Secretary of State telling him that something very peculiar had gone on in relation to the three-way contract. The WDA's right to retrieve the equipment was so weak that it even told an employee of Welsh Development International whose personal belongings had been taken by Mr. Carignan— presumably by mistake, when he swept the office bare—that it would be better to let sleeping dogs lie, and not to ask for them back. The attitude seemed to be, "We don't want to get involved. We have lost all that money. We had better just sweep it under the carpet and forget about it." I do not regard that as acceptable. The same applies to the flannel that I received from the Secretary of State for Wales on 30 September.
I have received a parliamentary reply that casts a little light on a round-the-world trip, lasting nearly three weeks, that finished a fortnight ago, on 16 November. Those on the trip went from Wales to Japan, from Japan to Australia, from Australia to the United States and thence


back to Wales. The reply to my written question, which I received a few hours ago, suggests that the concern that I expressed was entirely proper, despite what the hon. Member for Clwyd, North-West said.
The round-the-world trip was taken by three people, two of them employees of the agency, and one, Mr. Shimon Cohen, the personal public relations executive of the agency's chairman, an employee of Lowe Bell. The trip cost £28,000. This was no economy class venture to seek out inward investment; it was a de luxe trip, costing £9,500 a head.
I question the wisdom of such a venture. The leg between Wales and Japan could be seen as a mission to secure inward investment: it was during that leg that the new investment referred to by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) was announced, although it had probably been fixed up earlier. After that, however, the three proceeded to the Great Barrier reef, stayed for a couple of nights in the Holiday inn in Cairns, Queensland, the local holiday resort, and went on to Melbourne and Sydney.
I do not think that Australia is a great place to go for the purpose of seeking out foreign investment for Wales. Perhaps it will be in 10 years' time, when the economy has matured, but it is too early to expect Australia to be able to provide Wales with many factories and jobs this side of the year 2000.
The rest of the trip strikes me as entirely unjustifiable. The three had intended to stay for two nights in Tahiti —from 15 to 17 November—at the Beachcomber hotel, where they were booked in; the plan was then to go on to Los Angeles. That leg of the trip was, however, cancelled. They had planned to visit only one company, and a management change caused the visit to be crossed off the list.
The £28,000 really covered only a serious investment mission to Japan. The three could have returned direct from Japan, but instead they went to the Great Barrier reef, Melbourne, Sydney, Tahiti and then back home. That comes close to spending public money as though it were private money, and as though there were a lot of it to spend—as my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) said.
I have referred in early-day motions to the recycling of WDA grant money to consultancy companies that have been closely linked with, or owned by, senior officials of the agency. I disapprove strongly of that. However, I approve of the £250 million increase, although I think that it is time that the Secretary of State called in the WDA's chairman for a chat to put him back on the right road.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill

Clause 2 ordered to stand part of the Bill.

Bill reported, without amendment; not amended, considered; read the Third time, and passed.

Health Service (Wales)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]

10 pm

Mr. Gwilym Jones: I am glad to have the opportunity to discuss the health service in Wales. I recently tabled a question on the health service to my hon. Friend the Under-Secretary, in which I asked what assessment he has made of the impact of new hospital technology on surgical procedures and treatments in Welsh hospitals. I received a fascinating reply. He told me of the opportunities for deinstitutionalising health care and said that before too long up to 60 per cent. of surgery will be performed on a day basis, with more than 80 per cent. being bloodless. Many lay people hearing that would be amazed to think that any operation, let alone 80 per cent. of day operations, would be bloodless.
My hon. Friend explained further developments, such as the use of endoscopy in gynaecology, orthopaedic and general surgery, whereby a flexible tube photographs body cavities and organs without the trauma of surgery. Lasers have superseded more traditional surgical approaches to treating skin, eye and gynaecological disorders.
My hon. Friend the Minister referred to keyhole surgery and laparoscopic cholecystectomies—no wonder the health service abbreviates that to lap-cholies—which are replacing open abdomen gallstone operations. Damaged knee cartilage can be removed without opening the knee. Balloon angiography passes a balloon into an artery in a catheter. Those, and similar developments, are having a profound effect on the size and nature of our hospitals.
My hon. Friend concludes:
What counts is not hospital bed numbers but providing people with the right services in the right settings."—[Official Report, 26 November 1991; Vol. 199, c. 457.]
That made me want to look much deeper and I have tabled a series of questions to my hon. Friend on the health service in Wales. I regard this as an opportunity to put some facts on the record and further discuss the various arguments.
It is fairly well known that we are living longer. Since 1979, the number of over-60s has increased by 10 per cent. Similarly, the number of over-75s has increased by 62 per cent. I sought to ask my hon. Friend the Minister about centenarians. It is not possible to be precise, but Department of Social Security records show that there were approximately 100 people over the age of 100 in 1979; that has increased to 210 according to latest figures.
It could be said that the national health service is a victim of its own success; it is getting better and better all the time. It is treating us so well that we are living longer and it must now look after other problems and burdens, whereas mother nature would have terminated our existence previously. NHS figures show that the number of patients over 60 has increased by more than 83 per cent. in the past decade, compared with a numerical increase in the age group of only 10 per cent. The number of NHS patients over 75 has increased by 119 per cent., compared with a numerical increase of 32·6 per cent. The small sample of treatment of centenarians shows that their requirement of the national health service in Wales increased by more than the numerical increase.
Having considered the performance of the national health service in Wales, I believe that far too much time is usually spent examining incidental statistics which do not give the true picture—for example, the numbers of hospitals and hospital beds and waiting lists. There is an almost inevitable tendency for waiting lists to lengthen. As for hospital beds, there have been significant closures and new hospitals have been built to replace the old ones. That has often meant that more efficient new hospitals do not need the same number of beds as before.
If one were to dwell on, for example, the statistics for the number of hospital beds, the figures could be manipulated. The building of a brand new hospital in which the beds were kept empty would add to the total number of beds but would not add one jot to the number of patients being treated in Wales.
Similarly, waiting lists are the victims of the health service's success. I remember a while ago that one of my hon. Friends visited a hospital in Wales and was told that the waiting time for hip replacements was more than a year. He dared to ask what the position had been 12 months before and he was told that the hospital had not performed hip replacements 12 months earlier.
There are opportunities for people to queue for treatment that was not previously available. Hip replacements provide a perfect example. During the past decade there has been a 60 per cent. increase in the number of hip replacements. Similarly, there has been a 29 per cent. increase in hernia operations during that period. The increase in the number of varicose vein operations is even more marked at 184 per cent.
In considering bed use in national health service hospitals in Wales, it might be pertinent to take the example of maternity confinements. During the past decade, the length of obstetric stays for maternity purposes has decreased by 33 per cent. GP maternity has not decreased to the same extent—the decrease was about 21 per cent.—but both now represent a stay in hospital of usually 3·7 days. That is an example of a lesser demand for the health service and of a lesser need for hospital beds. Let us bear those figures in mind but think back a little further. In 1961—30 years ago—stays for obstetrics lasted 10·3 days and 9·2 days for the maternity category.
We have more sophisticated health care now, so there are many reasons why it is much more difficult to utilize hospital beds to the greatest advantage. One would imagine that the prevalence of highly technological treatments mean that they cannot easily be picked up and put down. They make planning far more difficult. One also imagines that if there is an interruption to the planning process an alternative cannot easily be substituted to make up for any gap. It must now be much more onerous to plan the use of resources in the health service.
There is a clear tendency with high-tech operations or maternity cases for stays in hospital to be shorter. There is also a marked swing in the amount of national health service work done as day treatment. I am very sympathetic to hospital managers in Wales because they face a much more complex task in trying to plan resources—the most obvious resource being hospital beds. However, I am glad that the Government have adopted a target of increasing the present bed use rate from 73·6 per cent. to 78 per cent. in three years. That is an effective and efficient use of health service resources.
In dealing with total spending on the health service in Wales, my right hon. Friend the Secretary of State for

Wales this afternoon announced a magnificent increase —the figure for 1992–93 will be £1,877 million. What a sum that is when one reflects that in the last year of the previous Labour Government the figure was a mere £481 million. That should really be explained. These days we always have to ask for a definition not only in cash terms but in real terms. I am glad that this afternoon my right hon. Friend was able to translate the figures into terms that most of us could understand. My family of four—myself, my wife and two children—know, as every similar family in Wales does, that the health service will spend £2,600 on every family of four in 1992–93. That is quite a big deal and that is how it should be regarded. It is a better explanation than trotting out the response that there has been a 60 per cent. increase in real terms. The translation is that we are spending more than £50 a week for every family of four.
The obvious next question should be: where does the money go? Possibly the most important task that the Government had to take on was repairing the cuts that they inherited when they came into office in 1979. It must not be forgotten that the only Government in the history of the national health service ever to make cuts was the previous Labour Government. Repairing those cuts was the priority of our Government in 1979.
That was especially evident in capital spending on the health service. Over the five years of the Labour Government capital spending declined by 21 per cent., so it was important that in the following years the Government reversed that trend. The 21 per cent. cut was in real terms and in real terms spending has gone up by 62 per cent. since 1979.
The Labour Government's cuts were not all deliberate. One of the causes of the cut in capital expenditure was the burden of hyper-inflation. We shall never forget that nurses and doctors working for the health service in Wales were among those who suffered badly from hyper-inflation under the Labour Government. Their take-home pay was cut in real terms. Doctors lost 9·9 per cent.; nurses did far worse, suffering a cut of 21·1 per cent. Happily, the Government have now made up for that, too. Since 1979 doctors' and dentists' pay has increased by 28·7 per cent. in real terms and that of nurses, midwives and health visitors—they have had a better deal, but their increase was even more necessary because they suffered more under the Labour Government—has increased by 48·7 per cent. in real terms.
When considering the health service, the most important statistic is not how much has been spent—in real terms or otherwise—but how many more patients are being treated. That is the real proof of the pudding. I am pleased to see that creditable improvements have taken place under the Government. A total of 132,000 more in-patients are being treated—an increase of 38 per cent. since 1979. There are 122,000 more out-patients—a 28·6 per cent. increase. There has been a staggering increase —72,000—in the number of day patients, which represents a 232·9 per cent. increase.
The number of in-patients and day patients increased under the Labour Government, too, but another example of the cuts that they inflicted on the health service is the fact that the number of out-patients fell—not by much, only 3·4 per cent. That illustrates the way in which the health service suffered under Labour.
The improvements that have been made are an excellent tribute to the staff who work so hard in the national health service. However, we should not forget that the increase in


the number of patients treated is not as large as the amount of extra funding. That is inevitable. The Government had to restore the cuts made by the Labour Government, including those suffered by doctors and nurses. They had to pay more for the more expensive, high-tech care and to meet the needs of the older patients that the health service now has to treat. But it entitles us to ask: can we do better with the health service? The overwhelming answer was that we had to reform it. It had gone on for such a long time in basically the same way that it had to be brought up to date to respond more realistically to the demands of the 1990s.
It was necessary to move forward and to consider whether we may have shed some important elements from the health service that should not have been taken away. If so, we could bring them back. The example that springs most readily to mind is the grade of matron. Matrons always seemed to run their hospitals in the best interests both of the hospitals and of the patients whom they served, so I welcome the announcement by my right hon. Friend the Secretary of State that there is to be a Pembrokeshire NHS trust.
So many wild claims have been made for electoral purposes—perhaps "deceptions" would be the right word to describe them—that hospitals would close and basic health facilities would be denied.
I notice that in the debate in Pembrokeshire those who seem to have really studied the matter—the community health council, the staff and the doctors—have come out in favour of the Pembrokeshire national health service trust. It means that a trust in Pembrokeshire will lead to local decisions being taken for the benefit of local people. We cannot turn the clock back, but it is the nearest that we can achieve to the desirable objective of putting matrons back into hospitals. They symbolise to me exactly what the national health service trust is all about.
In the campaign that has been waged against the NHS trust, it is a matter of great regret to me that politicians have also waged a campaign of denigration against the health service in Wales. One target has been the specialist treatment centres. I remember one allegation that was trumpeted loud—that the latest specialist treatment centre would employ only second-rate surgeons and that the presence of second-rate surgeons would lead to general practitioners not feeling that the centres were good enough for their patients. That was the most monstrous insult not only to the latest specialist treatment centre, but to the others which are already working hard and effectively on essentially the same basis to increase the number of operations. Do those who make those claims realise the damage that they are doing and the way in which they are denigrating a wonderful, fine and excellent health service? It may not be perfect, but at the very least we must defend it against political opportunists who make such claims.
We have a very good health service in Wales, although I cannot yet bring myself to describe it as an excellent one. There will probably always be, and there is now, room for improvement. I will give my hon. Friend examples. I have been in touch with him about hearing aids at the University hospital of Wales. There are other problems about ambulances and admissions to the University hospital of Wales. We shall always have such problems and I hope they will be as minor as possible.
We shall have to continue to increase the funding of the national health service. I know that the Government are fully committed to that objective continuing. We must firmly reject those who denigrate the health service and those who make outrageous claims for electoral purposes. People who make outrageous claims will come to realise that they cannot fool all of the people all of the time.

The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett): I welcome this debate and I congratulate my hon. Friend the Member for Cardiff, North (Mr. Jones) on achieving this debate at short notice tonight. As a user of the national health service, I share the determination that we should continue to improve our national health service in Wales.
As my hon. Friend said, in the past 12 years we have transformed the NHS. When we hear Opposition criticisms about the national health service under this Government's control, it is interesting to look at the latest opinion poll, published just a few days ago. It shows that 93 per cent. of the people of Wales are happy with the national health service under this Government. Despite that, we are not complacent or smug. We want to ensure that the 7 per cent. who are not happy should in future have little or no cause for criticism. That is why we shall continue the reforming programme that we have introduced in the past year or so in the NHS in Wales. We shall not be deflected from it by the Opposition's ignorant criticism.
It is worth looking at the statement on spending made by my right hon. Friend the Secretary of State for Wales this afternoon. We often hear talk from the Labour party about cuts. As my hon. Friend said, the only cuts in the health service in Wales took place under the Labour Government between 1974 and 1979 after the then Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey), was asked by the International Monetary Fund to return from his visit to New York and to cut public spending.
Since 1979, spending on the NHS has risen from £8 billion to £32 billion. After taking account of price increases, the increase in the Welsh NHS spending between 1979–80 and 1991–92 is no less than 58 per cent. in real terms. My right hon. Friend's announcement today brings the increase up to more than 60 per cent. in real terms by 1992–93.
That rate of increase is twice that which occurred under the Labour party between 1974 and 1979. It has meant that the proportion of our national wealth that we spend on health has risen from less than 5 per cent. to 6 per cent. The total figure which was announced in the statement today brings spending in the Welsh NHS this year to £1,877 million. Planned expenditure will go up by a staggering £186 million. That will mean that national health service expenditure will be boosted in Wales to £651 this year for every man, woman and child in the Principality. Those are truly staggering figures. When one looks at the resources that are being put into the NHS, one can see dramatically the difference over the past 12 years compared with the period of the previous Labour Government.
My hon. Friend referred to cuts in the hospital building programme under the previous Labour Government—down in real terms by £11 million, but up, under this


Government, by £27·5 million. He then spoke of the expectations of and demands on the Welsh health service. My hon. Friend was quite right to look in some detail at the changes that have taken place in what people expect—for example, a larger number of elderly people living to a greater age in Wales as a result of improved health care, and the new operations which have become available. My hon. Friend referred to increases in the number of hernia operations, varicose vein operations and hip replacements. It is no longer acceptable for people who have hernias to be told that they must wear a surgical truss. We do not expect women with varicose veins to be given surgical stockings and told to go away. People quite rightly now expect to have that treatment in the NHS, and the new NHS is providing it.
In 1961, the average maternity confinement was 9·2 days. Today it is 3·7 days. One can see clearly the information and the factors that are leading to a reduction in the number of beds. Opposition Members talk about bed reductions—reductions took place under the Labour Government as well—in a vacuum, without explaining the dramatic changes in the way in which people are treated today compared with many years ago.
My hon. Friend mentioned, for instance, that before long 60 per cent. of surgery will be performed on a day basis, with more than 80 per cent. of it being bloodless. He went into some detail—I will not attempt to pronounce some of the words that he found difficult to pronounce—of the new techniques which are being brought in, for example, with endoscopes, lasers and techniques known as keyhole surgery, all of which have reformed the way in which medical technology treats patients in the NHS and has made the need for so many beds and for a large number of old-fashioned hospitals now out of date.
I therefore make no apology whatever for the fact that both under this Government and under the previous Government we have reduced the number of crumbling Victorian hospitals and replaced them with new, modern district hospitals. Since 1979, we have opened major district general hospitals—for example, the Morriston phase 1 in Swansea, the Princess of Wales hospital at Bridgend, Ysbyty Wrexham Maelor, Ysbyty Glan Clwyd, Ysbyty Gwynedd, and the Prince Philip hospital in Llanelli—six brand new general hospitals. In the past year we have given approval for two more district hospitals to be prepared—at Neath and at Ynys-y-Plum in mid Glamorgan. We can see that progress is being made on all fronts under the Conservative party in control of the NHS in Wales.
In the 12 months I have been Minister, I have begun construction, attended or opened a new NHS facility in Wales every four weeks. More importantly, spending has led to dramatic improvements in the number of patients treated. As my hon. Friend mentioned, since 1979 the number of in-patients has risen by 38 per cent.—well over a third since we came to office—the number of out-patients has gone up by 29 per cent., and day case surgery has increased by almost 260 per cent. The results for the people of Wales have been dramatic. The number of men under 65 prematurely dying is down by 5 per cent. Premature deaths among women under 65 are down by 4 per cent. Perinatal mortality rates have been reduced by 40 per cent. The life expectancy at birth for someone living in Wales rose by two and a half years between 1979 and 1989. That is why we have been so determined to continue the reforms.
We should pause for a minute to consider what is being done and why. We are carrying out our reforms not because we believe that we need to disrupt the NHS, not because we want to be unpopular, but because we believe strongly that our national health service can be reformed and needs to be improved still further and that is what we are determined to do. We cannot go on, as we have in the past, not knowing the cost of operations, not being able to compare different treatments, operations and techniques in different hospitals and not knowing whether one general practitioner is prescribing more drugs than he needs to compared with another GP. We had to get a grip on spending in the NHS—not because we wanted to save money for the sake of saving money because we were mean-minded and penny-pinching, but because we believe that a pound that is wasted in the NHS is a pound that is not available for direct patient health care. That is why we have introduced our reforms and why we have been prepared to take flak from the Opposition parties which are not interested in the NHS, but only in scoring party political points.
The reforms on which we have embarked are now being copied around the world with 18 out of the 24 countries of the Organisation for Economic Co-operation and Development either planning or implementing similar reforms. The Dekker reforms in Holland oblige purchasers to choose between providers. Germany is asking its sickness funds to cancel contracts with inefficient hospitals and is obliging its hospitals to publish details of their costs. Even in socialist Sweden, the health authorities have started awarding contracts to health centres and hospitals which provide the right service at the right price.
We are determined to ensure that our reforms continue. Only today we announced that an additional 19 GP fundholders had been approved to take control of their own budgets from next April. My right hon. Friend the Secretary of State for Wales also announced today the establishment of the first NHS trust in Wales. As the constituency Member of Parliament for Pembroke, I am delighted that Pembrokeshire is once again leading the way in Wales by pioneering new forms of NHS management.
I believe that trusts are, increasingly, the natural form of organisation for NHS units in Wales. The more I talk to managers as I visit hospitals throughout Wales, the more it becomes clear that they are enthusiastic about the new reforms and want to be able to go down the road of becoming NHS trusts. I hope that we shall shortly be able to announce that a substantial number of NHS hospitals and units in Wales have applied for NHS trust status. That shows that the Opposition's talk about our policy being unpopular is totally bogus because, of their own volition and without any pressure being applied, the staff and management of the NHS in Wales are applying to the Welsh Office with expressions of interest in becoming trusts. That shows that our policy is well understood by the professionals, who very much want the additional management control that trust status brings.
I find it strange that the Labour party is opposing the idea of NHS trusts because we are simply seeking to return to the system of hospital management boards which existed before 1974. Indeed, at that time the Labour party opposed the establishment of district health authorities and wanted to keep that old system. We have all recognised that big is not necessarily beautiful, and that there is much to be said for devolving management down


to smaller units, but the Labour party is now in favour of large centralised bureaucracies. It opposes giving local people the opportunity to manage their own health services. I am delighted that we in Pembrokeshire have been able to lead the way.
The Government have also introduced the patients charter. I do not want to go into detail about that now because time is running short, but every home in Wales has already been sent a copy of the charter—or will be in the next few weeks—giving patients details of their rights. I believe that every person in Wales should know how their money is being spent and what services they can expect.
I turn finally and briefly to the Opposition's policy. It is interesting that no Opposition Members have stayed in the Chamber for this debate. Labour politicians throw up their hands in horror and make snide remarks about accountants in the NHS reforms, but they do not say that the opposite of achieving value for money through the reforms is to waste money. That is the most repugnant feature of Labour's dishonesty on health matters.

Opposition Members try to pretend that they would spend more, but the hon. Member for Derby, South (Mrs. Beckett) and her right hon. and learned Friend the Member for Monklands, East (Mr. Smith) say that they cannot. When one looks at the Labour party's proposals, it becomes clear that the Opposition do not have any real policies for reforming the NHS. The only thing in which Opposition Members are interested is stopping reform or any change to the status quo. They would be the mouthpieces of the National Union of Public Employees and the Confederation of Health Service Employees. They would not in any way provide the service that the patients want.
That is why we must continue with the overriding objective set out in our agenda for action, which is to take the people of Wales into the 21st century with a level of health care that is on course to compare with the best in Europe. Our aim is nothing less than the regeneration and improvement of one of our most important public services for the benefit of all our countrymen. It is a challenge that we relish and accept. We shall not fail.

Question put and agreed to.

Adjourned accordingly at half past Ten o'clock.